Saudi Arabia’s oil minister said Thursday that a number of major crude-producing countries reached an initial agreement to extend output cuts, as persistently high stockpiles weigh on prices, Bloomberg reports.
OPEC and other major suppliers have failed, after three months of limiting production, to achieve their target of reducing oil inventories below the five-year historical average, Saudi Arabia’s Khalid Al-Falih said at a conference in Abu Dhabi. The producers pledged to reduce output for six months starting in January. Al-Falih didn’t identify or specify the number of countries in the initial deal for an extension.
“Although there is a high level of commitment, we haven’t reached our goal, which is to reach the five-year average,” Al-Falih said. “There is an initial agreement that we might be obligated to extend to get to our target.” Countries participating in the cuts have yet to reach a consensus on prolonging their agreement into the second half of the year, and an extension wouldn’t necessarily be for an additional six months, he said.