November 27, 2017

STRAPPING THE LIFEBOATS TOGETHER: OPEC, Russia Said To Announce Oil Pact Extension On Nov 30.

While OPEC and Russia have agreed on a general framework, discussions are ongoing as to how OPEC could meet Russia’s demands, including how to include a link between the size of the cuts and the state of the rebalancing of the oil market. There are also discussions about including an option to review the pact again in early 2018, including calling a new meeting, according to Bloomberg’s sources.

As of last week, not all Russian oil companies were on board with extending the cuts, and they were said to have discussed a six-month extension with Energy Minister Alexander Novak.

Novak, for his part, said on Friday in a television interview posted on the energy ministry’s website that some 50 percent of the global oil oversupply had been erased and Brent prices had risen to an “acceptable enough” level of more than $60 a barrel.

Nevertheless, the oil market is not yet balanced and the pact needs to be extended, Novak said, adding that Russia supports an extension, and various options are being discussed.

If they pull it off, that’s more market share for American frackers. If they don’t, we get cheaper oil.

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