Following fears that the current OPEC compliance of the oil production reduction agreement was slipping, it was suggested the agreement could be extended, at the Russian Energy Week Conference. The oil price edged higher midday Wednesday.
According to a number of reports, Russian President Vladimir Putin said it was possible the OPEC oil output production cut agreement could be extended past the current March 2018 end date, to the end of next year. Of course, no firm, detailed discussions or agreement has yet occurred.
But, it’s the latest sign that the OPEC group are willing to impose their output cut plan for a longer period, to help further run-down oil stocks and induce a recovery in the oil price.
The price of Brent crude oil, the global benchmark ,was around the $55 per barrel mark midday Wednesday, trading higher than the first days of the week.
While concerns over a slippage in compliance with the OPEC output cut agreement has weighed on oil prices, so too has the strength of the US dollar.
Indeed, the US dollar also lost a little ground Wednesday as the British pound moved higher on better-than-expected UK September services PMI survey. A development which also likely gave the oil price a little respite.
Russia relies on its energy production for over one-third of its economic revenue and appears committed to supporting a recovery in the price of the valuable commodity. The oil price sank as low as $24 per barrel, as an oversupply of oil weighed heavily on prices.
A number of details have helped reverse that situation. Although, the price of oil remains below the $60 per barrel OPEC producers are said to be targeting as a sustainable level.
However, in order to keep the production and price of oil at a level that pleases everyone, further co-operation will be required across OPEC and between OPEC and non-OPEC members, too.