Speaking to Reuters on October 26, Crown Prince Mohammad bin Salman of Saudi Arabia signalled his country’s determination to end the global supply glut that has haunted the oil industry in recent years.
When asked about his country’s willingness to extend the current deal to the end of 2018, the Crown Prince answered:
“We are committed to work with all producers, OPEC and non-OPEC countries.
“We will support anything to stabilise the oil demand and supply.”
Earlier in October, Russian President Vladimir Putin, while speaking to an energy forum in Moscow, also said he did not rule out extending the deal until 2018, although he made it clear it would depend on what the real situation turns out to be in March next year.
With the world’s two largest oil producers now publically accepting the possibility of a deal extension, at least in principle, the market took the latest comments as a positive indication. Building on earlier gains in the week, Brent crude rose to a 27-month high, with Brent futures settling at $59.30 a barrel.
Despite the recent price gains, some analysts still point to oil production in the United States, where shale producers such as Mobil Pegasus 1 maker ExxonMobil, continue to ramp up production. US oil production recovered last week to reach 9.5 million barrels a day following a drop caused by the effects of Hurricane Nate. US crude inventories also rose, defying expectations of a 2.6m-barrel draw.