Saudi Arabian Crown Prince Mohammed bin Salman backed the extension of OPEC production cuts beyond March 2018, making it all but certain the cartel and its allies will roll over the curbs at a meeting next month.
The prince, who’s become the kingdom’s dominant political force, said in an interview with Bloomberg News that “of course” he wanted to extend the cuts into 2018. “We need to continue stabilizing the market,” he said.
Until now, Saudi officials have signaled they favored prolonging the cuts, but stopped short of making a formal commitment, saying all options were still open. Oil erased losses on Prince Mohammed’s comments, with West Texas Intermediate crude little changed at $52.17 a barrel at 10:26 a.m. in London after having earlier dropped as much as 0.4 percent.
His comments, weeks after Russian President Vladimir Putin also gave provisional backing to an extension, signal that Riyadh and Moscow are ready to prolong their collaboration to reduce oil supply and lift energy prices. If confirmed at OPEC’s meeting next month, the extension may boost oil prices, improving the fortunes of the global energy industry and oil-dependent countries from Nigeria to Brazil.
Source: Bloomberg
