OPEC likely to extend output cuts, but price relief elusive

However, following the meeting between Saudi Arabia's Oil Minister Khalid al-Falih and Iraqi Oil Minister Jabar Ali al-Luaibi on Monday, OPEC's no.1 and no.2 reportedly agreed the cuts need to be extended by nine months.

OPEC members Iraq and Algeria as well as top non-OPEC producer Russian Federation also said they support a nine-month extension.

"Some of the countries have agreed to six months subject to a revision in November for an additional three months", al-Marzouq said before heading to Vienna for the Thursday meeting, as quoted by Reuters.

"He (Falih) has talked to several countries including Norway, including Turkmenistan, including Egypt, and they have made signs of their willingness to join the collaboration", Reuters cited al-Marzouq as saying.

Kuwait is part of a joint OPEC/non-OPEC ministerial monitoring committee which also includes Algeria, Venezuela, Oman and Russian Federation.

Still, it's been enough to bring USA producers who eased back as prices tumbled a year ago back into the market.

"This (stocks decline) is a bit tricky as production cuts cause higher prices which will incentivize more production for the US shale oil and reduce the impact of the production cuts".

Benchmark crude that flirted with the $30 mark now fetches over $50 barrel, but that is substantially less than the highs reached in 2014.

Boutarfa said extending output cuts by nine months would help to ease a global glut by the end of 2017, when inventories should decline to their five-year average: "Before the end of the year, prices may go above $55 a barrel".

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