Growing news across oil exporting countries have been unpleasant. This Monday, Russia and Saudi Arabia announced that they request a nine month OPEC output cut extension. Following that Kuwait and Oman has joined Russia and Saudi Arabia – the two largest producers among the 24 producers who earlier agreed to cut output in 2018 for an extension.
As Kuwait join the movement to extend supply cuts up to a nine month period, this has already contributed to a soar in crude prices on the rising hope of output cut extension. November last year, OPEC agreed to cut 1.2 million barrels a day of oil production.
In the first half of 2017, OPEC, Russia and some additional oil producers had previously agreed to minimize production by 1.8 million barrels per day – lasting them till March. Oman, a non-OPEC producer like Russia, expressed support the same day for curbs to continue until the end of March.
Currently, as Kuwait joins in, there are high hopes that the OPEC meeting on the 25th of May will result in an extension to the supply cut. However, this is not certain and anything can happen following the 25th May meeting.