FxWirePro: Oil price wobbly and weak even as OPEC to extend production cuts through 2018

Both Brent and WTI prices are up this week; 1.1 percent and 0.8 percent respectively, however, in both cases price remains well below their recent peak and still down for the week, even as the OPEC and participating non-OPEC countries are set to extend the oil production agreement through 2018.

Speaking ahead of the OPEC meeting with reporters, Saudi Arabia’s oil minister Khalid al-Falih said that members are in perfect alignment as they pursue to extend the production cut by 9 months to December 2018. The current agreement will expire in March 2018. Oil markets have wobbled this week as Russia pushed for a shorter extension to the deal due to concerns over boosting prices too high and reviving US shale. But OPEC ministers now appear confident Russia is backing the cuts throughout next year.

Saudi oil minister added that it is premature to talk about an exit at the moment and said that it would be done very gradually to make sure the market doesn’t suffer a shock. Iraqi, Iranian and Angolan oil ministers said that a review of the deal would be done in June if the market becomes too tight.

WTI is currently trading at $57.7 per barrel and Brent at $5.5 per barrel premium to WTI.