OPEC and 10 producers outside the cartel, including Russia-which produced around 10.9 million barrels a day in 2017-agreed late past year to extend an agreement to hold back crude output by almost 2% through the end of 2018.
Oil prices climbed on Monday, pushed higher by comments from Saudi Arabia that cooperation between oil producers who are now withholding supplies in an effort to prop up the market would continue beyond 2018. "There is a readiness to continue cooperation beyond 2018.The mechanism hasn't been determined yet, but there is a consensus to continue", Saudi Arabia's energy minister Khalid al-Falih said in Oman.
"There is a readiness to continue cooperation beyond 2018".
"This doesn't necessarily mean sticking barrel by barrel to the same limits or cuts, or production targets country by country that we signed up to in 2016, but assuring stakeholders, investors, consumers and the global community that this is something that is here to stay".
Nonetheless, he did not expect the 14-member cartel to end its deal with 10 other allied producers in June. Money managers raised their net long US crude futures and options positions in NY and London by 40,855 contracts to 541,990 in the week to January 16, a record high, the US Commodity Futures Trading Commission said.
If the U.S.is the chief victor of the energy industry in 2018, it is followed closely by Saudi Arabia, which has persistently called for high crude prices because it will add value to its initial public offering of Saudi Aramco; and as pundits tousled over what will happen to the market next, Amin Nasser, chief executive officer for the state-owned company, announced that it will be ready for the IPO in the second half of this year.
The analysts have already predicted that it could be expected to drop the oil constraints before the end of 2018.
USA oil output is set for "explosive" growth this year as prices rally, the International Energy Agency said on Friday.
But both Falih and UAE minister Suhail al-Mazroui said they did not think the rise in prices would hurt global demand for oil. "This is the first time we've taken a breath", said Phil Flynn, analyst at Price Futures Group in Chicago.
OPEC has a self-imposed goal of bringing oil inventories in industrialised countries down to their five-year average.
The US oil rig count, an indicator of future production, fell by five this week but at 747, was still much higher than the 551 rigs a year ago, according to General Electric Co's Baker Hughes energy services firm.
"I think one of the things we need to define in the next few months, before we meet in June, is what is the real target more precisely, and that is work that still needs to be done, and we still need to reach a consensus". The next meeting of the joint ministerial committee overseeing implementation of the cuts will be held in April in Saudi Arabia, an OPEC statement said.