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U.S. oil production could still threaten to disrupt the market balance

Energy ministers from the world’s two top producers said that supply cuts should be prolonged for nine months, until March 2018.
[nL8N1IH1MT] “When the two biggest oil producers of the world reach a consensus on the extension of a supply cut, the market will listen,” Tamas Varga, of oil broker PVM, said in a report.
The ministers said they hoped other producers would join the cut, which would initially be on the same volume terms as before.
(Additional reporting by Henning Gloystein and Alex Lawler; Editing by Marguerita Choy and David Goodman) ((Jessica.Resnick-Ault@thomsonreuters.com; 646-223-6052;)) Keywords: GLOBAL OIL/ (UPDATE 12)
That is longer than the optional six-month extension specified in the deal.

Oil rises 2 percent after Saudi and Russia back longer supply cut

Oil rises

Energy ministers from the world’s two top producers said that supply cuts should be prolonged for nine months, until March 2018.
“When the two biggest oil producers of the world reach a consensus on the extension of a supply cut, the market will listen,” Tamas Varga, of oil broker PVM, said in a report.
The ministers said they hoped other producers would join the cut, which would initially be on the same volume terms as before.
That is longer than the optional six-month extension specified in the deal.
Some analysts said that U.S. production could still threaten to disrupt the market balance unless the cuts were deepened.

referring to The oil cartel Opec, which is dominated by Saudi Arabia, and non-Opec producers led by Russia have been attempting to use the output cut to drive up prices.
The US has also refused to cut production and its own output has increased by about 10% since last year.
Price wobbleAn agreement to cut production was reached in September last year, but the deal was due to run out later this year.
In recent years Saudi Arabia has been in a pitched battle with the US to try to reduce the price of oil.
A central part of their problem is the US shale oil business and the competition to the established industry it has come to represent in the past decade.
Oil price

 

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