OPEC again signals extension of cuts

OPEC sent its strongest signal yet on Thursday that oil output cuts will be extended until the end of 2018, saying negotiations are taking their lead from Vladimir Putin’s tentative backing for a further nine months of curbs.

If the Organization of the Petroleum Exporting Countries and allies including Russia decide they need to extend their supply deal, it should be done at least until the end of next year, the Russian president said in Moscow on Oct. 4. That statement is the basis for talks ahead of next month’s OPEC gathering, led by Russian Energy Minister Alexander Novak and his Saudi counterpart, Khalid AlFalih, said OPEC Secretary-General Mohammad Barkindo.

The comments signal not only the growing chance of an extension of the cuts but also how far Russia and Saudi Arabia, two countries that haven’t been close historically, are working together to lift oil prices. King Salman visited the Kremlin earlier this month — the first visit by a Saudi monarch to Russia.

Putin “gave a very pointed answer, which we are taking very seriously,” Barkindo told reporters at the Oil & Money Conference in London. “Khalid Al-Falih is on tour of some of our member countries to build consensus. Mr. Novak is also in extensive consultations with non-OPEC.”

OPEC and its allies are scheduled to meet in Vienna on Nov. 30.