OPEC Prolonging Cut Would Achieve Mission to Clear Oil Glut
The world’s two biggest oil exporters seem to have finally figured out how to eliminate a global surplus that’s kept crude prices in check for almost three years.
Saudi Arabia and Russia said in Beijing on Monday they favor prolongingthis year’s oil curbs to the first quarter of 2018. If they convince fellow producers to adopt the strategy when OPEC and its partners meet next week, it will pare near-record inventories in developed nations by 8 percent and erase the glut weighing on the market, according to Bloomberg calculations using U.S. government data.
“They have a very clear goal,” said Mike Wittner, head of oil market research at Societe Generale SA in New York. “They remain focused on having stocks get down to the five-year average. They really want to see it work.”
Written by Grant Smith