Iraq's Crude Oil Production Is near a 9-Month Low

Kuwait joined Saudi Arabia and Russian Federation in supporting an extension of oil-output cuts by Opec and other global producers through the first quarter of 2018 to help trim global stockpiles.

Energy ministers from the two countries said on Monday that supply cuts should be prolonged for nine months, until March 2018.

Benchmark West Texas Intermediate crude oil for June delivery traded up almost 3% this morning to $49.25, while Brent crude for July delivery traded up 2.9% at $52.32.

Initially, it had been planned that the deal to cut nearly 1.8 million barrels per day in production and agreed on December 10, will be effective in the first half of this year with possibility of rollover toll the end of 2017.

The Saudi-Russia announcement on Monday will probably extend a price rebound that began last week, though the rally is "modest" compared to the increase when OPEC cuts were first agreed to late a year ago, Goldman Sachs analysts said in a report.

It didn't really work, so Opec and a few other producers cut production hoping to revive prices.

Brent crude, the global benchmark, had risen $1.20 to $52.04 a barrel by 0847 GMT and traded intraday at $52.26, the highest since April 26. Libya's crude production has risen to more than 800,000 barrels a day, the most since 2014, while Nigeria's 200,000-barrel-a-day Forcados pipeline is ready to export again after nearly continuous halts since February 2016.

The agency trimmed its estimate for first-half global demand growth by 115,000 barrels a day, citing weaker consumption in "previously solid countries" like India and the USA, yet kept the full-year growth forecast steady.

Russian Federation and Saudi Arabia wil hold consultations with the parties to the deal before May 24, according to the joint statement of the two countries.

Kuwait is in full support of extending a multilateral crude oil production cap into the early part of next year, the country's oil minister said Tuesday.

An agreement to cut production was reached in September last year, but the deal was due to run out later this year.

The Kuwaiti minister said there were already positive signs emerging to support stronger crude oil prices, days before parties to the agreement meet in Vienna to consider a formal extension.

Another 3-5 countries might join the agreement on reducing oil production by OPEC countries and non-cartel exporter countries, he went on.

  • Zachary Reyes