Oil prices have risen more than 3% after Saudi Arabia and Russia said a deal to cut production should be extended until March next year. The oil cartel OPEC, which is dominated by Saudi Arabia, and non-OPEC producers led by Russia have been attempting to use the output cut to drive up prices.
Following the meeting in Beijing, Saudi Energy Minister Khalid al-Falih and his Russian counterpart Alexander Novak said: “The two ministers agreed to do whatever it takes to achieve the desired goal of stabilising the market and reducing commercial oil inventories to their five-year average level.”
The two countries produce 20 million barrels of crude oil a day – about one-fifth of global consumption – and other oil-producing nations are expected to follow their lead over cuts. However the US shale oil business and the competition to the established industry it has come to represent in the past decade still remains a major part of their problem.