Russia and nine other non-OPEC producers agreed to a nine-month rollover of oil supply cuts on Tuesday, ratifying a policy designed to prop up crude prices amid a weakening global economy.
It comes less than 24 hours after energy ministers from the world’s most powerful oil-producing nations thrashed out a deal to restrict the amount of crude flowing into the global market.
OPEC reached a deal to extend production cuts until March 2020 on Monday. The Middle East-dominated producer group was able to overcome their differences after five hours of negotiating in Vienna.
In a statement released Tuesday, the energy alliance said it had made the decision to prolong production cuts “in view of the underlying large uncertainties and its potential implications on the global oil market.”
International benchmark Brent crude traded at $64.48 Tuesday afternoon, down around 0.8%, while U.S. West Texas Intermediate (WTI) stood at $58.55, almost 1% lower.
Speaking to CNBC’s Dan Murphy in Vienna, Russian Energy Minister Alexander Novak said the agreement was about preventing major volatility in the market and preserving an “albeit unsteady situation.”
“I think it is right not to make any sudden movements now and maintain the situation as it is,” Novak told CNBC. “What is important is that we have agreed to monitor the situation. If there are any drastic deviations, then we can swiftly get together and decide on what to do,” he added.
Novak iterated that if producers observed a deficit in the market in the future, then they could look at increasing production.
CRR increment to 27.5% balances the odds to rising inflation, says experts
Lagos ports congestion: NPA orders diversion of ships to eastern ports
CBN increases banks' Cash Reserves Ratio to 27.5%
FG suspends salaries of tertiary institutions’ workers not on IPPIS
FG to borrow N2tn from N10tn pension fund
Oil prices rise despite impact of China virus on fuel demand haunting the market
Cabotage fund hits N72.4bn as FG sets up disbursement c'ttee
Futures point to lower on worsening China virus concerns, mixed earnings
Lagos, Rivers, A’Ibom, Delta, C’River top states’ indebtedness list
Refineries posted N123.3bn loss in 10 months – NNPC