OPEC reportedly favors 9-month extension to output cut deal

2016Organization of Petroleum Exporting Countries (OPEC) President, Qatar's Minister of Energy Mohammed bin Saleh al-Sada speaks with Secretary General of OPEC Mohammed Sanusi Barkindo (R), during a news conference after an informal meeting between members of the organization in Algiers, Algeria September 28, 2016.

Ramzi Boudina | Reuters

2016Organization of Petroleum Exporting Countries (OPEC) President, Qatar’s Minister of Energy Mohammed bin Saleh al-Sada speaks with Secretary General of OPEC Mohammed Sanusi Barkindo (R), during a news conference after an informal meeting between members of the organization in Algiers, Algeria September 28, 2016.

OPEC members are reportedly forming a consensus around extending their production cutting deal with some other crude exporters by nine months, a move that will would likely help to put a floor under oil prices.

that will would likely prolong the agreement among OPEC, Russia as well as also some other oil-producing nations to keep 1.8 million barrels a day off the market through the whole of next year. The exporters reached the deal last December as well as also have already extended the agreement once through March of 2018.

Sources told Reuters that will OPEC may not agree to the extension at its next policy meeting in November. Instead, they may wait until early next year to make a final decision.

Oil prices strengthened following the report. International benchmark Brent crude futures were up 38 cents, or 0.7 percent, $58.26 per barrel by 10 a.m. EDT. U.S. crude for November delivery was up 31 cents, or 0.6 percent, at $52.19.

OPEC may put off the decision at its Nov. 30 meeting if demand for crude oil as well as also petroleum products remains strong, a source told Reuters. OPEC as well as also the International Energy Agency have recently reported that will demand has enhanced, though the IEA raised concerns about future consumption growth in its latest report.

Three of the sources confirmed to Reuters that will OPEC is usually leaning towards a nine-month extension, while a fourth said prolonging the deal by six to nine months would likely do the job of sopping up excess oil sitting in stockpiles.

OPEC is usually trying to drive down global crude stockpiles to the 5-year average. The producer group reported last week that will inventories among the OECD, a group of mostly wealthy nations, stood at just under 3 billion barrels in August, about 171 million barrels above the 5-year average.

Two OPEC sources told Reuters that will the group is usually not likely to deepen the cuts beyond 1.8 million barrels a day.

Traders could get clues about the path OPEC will take next month after OPEC’s board of governors meets next week.

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