Russia, Saudi Arabia back extension of oil output cuts

Saudi Arabia and Russian Federation said they favor prolonging oil-output cuts by global producers through the first quarter of 2018, setting a firmer timeframe for a likely extension of the curbs.

On the news, Brent crude rose 2.3% to $52.04 a barrel while West Texas Intermediate (WTI) climbed 2.6% to $49.09.

The EIA said it expects OPEC's total oil export revenues to increase in 2017 and 2018 because of gains in crude oil prices.

Energy ministers from the world's top two oil producers said cuts should continue until March, longer than an optional six-month extension specified in the deal.

The ministers said that while they start from the assumption of rolling over the current deal, they also hoped that "a wider circle of countries outside the current group will see the benefit of this cooperation in bringing stability to oil markets, and will join the effort". There's a "good chance" that Russian Federation, a non-Opec nation, will extend its cooperation with the organisation because Saudi Arabia wants price stability and is complying with its obligations in the deal, he said.

The cuts were agreed by OPEC in November of last year and represented the first agreement of its kind in eight years, in an attempt to curb the oil rout caused by excessive oversupply.

The decline in export revenues is "mainly a result of the fall in average annual crude oil prices during the year", the EIA said.

The effects of these talks have has a substantial effect on the oil price.

More news: Tuesday Apple Rumors: Apple May Discontinue the iPad mini

Some analysts said that USA production could still threaten to disrupt the market balance unless the cuts were deepened.

Surging U.S. output has raised concern that the cuts are failing to reduce a glut.

[T] oday the most closely watched data point on the supply side is U.S. crude production.

Premier Oil was the biggest oil company climber after it revealed better than expected trading update as its two-year financial restructuring draws to a close.

The ministers agree the deal should be extended through the first quarter of next year at the same volume of cuts, Al-Falih said.

Recent US gasoline demand, a closely-watched metric, is down by nearly one-quarter of a million barrels per day from a year ago.

Goldman retained its average Brent price forecast for the third quarter of 2017 at US$57 per barrel.

"Growth was weaker than expected in the first quarter, however, with notable downward revisions seen in the USA - where demand is essentially flat - and in Germany, Turkey and India", the report said.

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