Russian energy minister backs oil output cut deal

Russia's energy chief supports extending last November's deal by the world's largest oil producers to rein in their combined output.

Prolonging the agreement with the Organisation for Petroleum Exporting Countries to reduce oil extraction will speed up the return of the market to a healthy state, Alexander Novak said on Monday, according to reports.

In parallel, the cartel of oil producing nations and the countries from outside its ranks that participated in the November output cut deal are studying a possible extension for nine more months, according to Reuters, which cited an industry source.

Under the terms of the deal, OPEC, Russia and other producers agreed to curb their total production by 1.8m barrels a day starting from 1 June.

However, increased output from several countries in the run-up to the agreement's coming into force pushed global stockpiles even higher and that extra supply was still finding its way to markets (and into the data) amid higher production in the US and a resumption of Libyan exports amid what analysts at Barclays Research said was "stretched positioning" by traders.

Another two OPEC sources referenced in the same report above differed in their assessment of the situation, with one saying that core Gulf OPEC producers had talked abut an extension of more than six months while another OPEC source said a deal past six months would be tough to agree on, but "anything can happen".

A third source told Reuters an extension of up to 12 months was an option.

On Monday, Saudi Energy Minister Khalid al-Falih said: "Based on consultations that I've had with participating members, I am confident the agreement will be extended into the second half of the year and possibly beyond."