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Saudis Back More Supply Cuts in Support of Oil Prices

Crown Prince Mohammad bin Salman said the journey toward restoring market balance is improving despite challenges.

DUBAI—Saudi Arabian Crown Prince Mohammed bin Salman on Saturday said he backs limiting crude-oil output beyond an agreement among big oil producers that currently extends through March 2018.

The statement by Prince Mohammad, the next in line to the Saudi throne, is the strongest signal yet that the Organization of the Petroleum Exporting Countries and its allies like Russia will agree to continue curbing production at their next meeting on Nov. 30. Saudi Arabia is OPEC’s largest producer and most influential member.

The OPEC cartel and a Russia-led group of non-OPEC producers are in the middle of an accord that cuts global oil output by almost 2% through March 2018.

“The Kingdom affirms its readiness to extend the production cut agreement, which proved its feasibility by rebalancing supply and demand,” Prince Mohammad said in a statement Saturday.

His statement came after a Wall Street Journal report last week about Saudi Arabia and Russia’s desire to extend their production-cutting agreement until the end of 2018.

Brent crude on Friday topped the elusive $60-a-barrel mark for the first time in more than two years amid hopes that OPEC will continue curbing output. The Journal has reported that Saudi Arabia privately wants a price of $60 a barrel, a level that allows producers to make money but won’t usher in a flood of new supply from U.S. shale producers.

“The high demand for oil has absorbed the increase in shale oil production…The journey towards restoring balance to markets, led by the Kingdom, is proving successful despite the challenges,” Prince Mohammed said.

Russian President Vladimir Putin has also signaled his willingness to back a renewal of the production-cutting agreement. Energy revenue makes up about a third of the Russian government’s budget.

Iran, Algeria, Venezuela and other OPEC members have also signaled their willingness to extend the cuts.


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