Russia has agreed with Saudi Arabia to extend the deal with OPEC, Russian President Vladimir Putin said earlier, as oil prices come under renewed pressure from rising USA supplies and a slowing global economy. This program is aimed at combatting low demand because of a weakening global economy and rising USA production.
The United States is not a member of OPEC, but it has demanded Saudi Arabia pump more oil to compensate for lower exports from Iran after slapping fresh sanctions on Tehran.
The price of Brent crude, the global standard, rose 32 cents Monday to $64.06 a barrel.
OPEC's 14 member countries are meeting in Vienna on Monday to agree on a common position. The agenda is focused on the extension of the agreement for six or nine months from June when it expired.
"I'm very glad that His Excellency Mohammed Sanusi Barkindo has another three years as OPEC secretary general", Manuel Quevedo said at a press conference after OPEC talks.
OPEC+ oil ministers were to hold a series of meetings yesterday and today to discuss production policy.
Zanganeh did not specify current and desired volumes of oil exports. The prospect of increased USA production of oil from shale deposits also hangs over the market.
"Without unity among members of OPEC, it is meaningless to plan cooperation between OPEC and non-OPEC countries", he said.
Iran is on board with an output cut extension by Opec and its allies for the second half of the year, according to the country's petroleum minister, despite denouncing what he termed the alliance's "unilateralism". Once OPEC's second-largest exporter, the nation's oil production has fallen drastically in recent months, as the United States sanctions started to bite.
Saudi Energy Minister Khalid al-Falih said on Sunday that OPEC and its allies led by Russian Federation would most likely extend their oil output-cutting deal by nine months and that no deeper reductions were needed, Trend reports citing Reuters.
The trade deal was basically just a ceasefire and an extension of the OPEC+ cuts was a "foregone conclusion", she said.
"The agreement confirms that the Saudi-Russian partnership paved the way to guarantee the interest of producers and consumers and the continued growth of the global economy", Falih tweeted. The Latin American country's output is in free-fall under the Maduro government, while Iran's supplies are being hit by US sanctions.
The OPEC meeting on Monday will be followed by talks with Russian Federation and other allies, a grouping known as OPEC+, on Tuesday.
For oil, that means that prices can still climb from here as the negotiations commence again and optimism runs high - but that the likelihood of a corrective pullback increases significantly from there on out.
It won't please President Donald Trump, however, who has repeatedly called for OPEC to pump more oil to keep US gas prices in check.
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