OPEC agreed on Thursday to extend oil output cuts until the end of 2018 as it tries to finish clearing a global glut of crude while signalling it could exit the deal earlier if the market overheats. David Pollard reports.
Smiles from Saudi Arabia's oil minister as he arrives in Vienna ..... For what, perhaps, he already saw as a done deal. OPEC's biggest producer making clear it wanted to extend production cuts ... From when the current agreement expires in March - to the end of next year. (SOUNDBITE) (English) SAUDI ENERGY MINISTER, KHALID AL-FALIH, SAYING: "My personal expectation is that 2018 will be more of the same as in 2017, which is I think healthy and manageable by the market." And even before any new deal was announced, Brent crude prices gained on that sentiment. Rising more than a per cent to above 64 dollars a barrel .... Within close range of where most members wanted them. (SOUNDBITE) (English) IRANIAN OIL MINISTER, BIJAN NAMDAR ZANGANEH, ANSWERING REPORTER'S QUESTION ABOUT OIL PRICES, SAYING: "Around 60 (US dollars per barrel), all the OPEC members and producers are satisfied with the price around 60 for brent (crude oil)." Others too see merit in maintaining the status quo. 1.8 million barrels per day of cuts this year has helped halve excess global stocks. Nigeria - exempted from the current deal because of unrest and low output - is now expected to participate. And Libya's inclusion was also under debate. Russia had reservations While pricier crude suits Saudi plans to float state oil giant, Aramco, the world's largest non-OPEC producer needs much lower prices to balance its budget. (SOUNDBITE) (English) JAMES BAVAN, CHIEF INVESTMENT OFFICER, CCLA, SAYING: "There is a real challenge for OPEC insofar as every time the price goes up the shale players in the United States simply put up the production and drive down the price again. And there is no global agreement on pricing and therefore the capacity for Saudi and Russia to set the price is quite limited." A review of the deal could come at the next OPEC meeting in June. In case crude prices begin to overheat.