ST PETERSBURG, Russia (Reuters) - The main goal of proposed extension of oil output cuts deal is to bring the global commercial oil inventories down to 5-year average and stabilize the market, Russian Energy Minister Alexander Novak said on Tuesday.
“We never say that our goal is a price. Our goal is to balance the market and to remove the surplus (from stocks),” Novak told reporters.
Saudi Arabia and Russia, the world’s top two oil producers, agreed on Monday on the need to extend output cuts for a further nine months until March 2018 to rein in a global crude glut, pushing up prices.
Initially, it had been planned that the deal to cut almost 1.8 million barrels per day in production and agreed on Dec. 10, will be effective in the first half of this year with possibility of rollover toll the end of 2017.
Novak said the new proposal foresees the same cuts in production with extension of time frame by 9 months. He said the longer extension was needed to balance supply and demand on the global oil market.
“We believe that the market won’t be able to balance by the year-end,” he said.
The minister also said that he hoped that 3 to 5 new countries will join the global pact. Sources have told Reuters that Turkmenistan is one of the new countries which may join the global deal.
Reporting by Darya Korsunskaya; writing by Vladimir Soldatkin; editing by Katya Golubkova