Saudi Arabia’s energy minister Khalid al-Falih on Thursday said that Oil producers are moving closer towards agreement on extending the Opec-led deal to limit output , as the cartel battles excess stockpiles and a resurgent US shale industry that have weighed on prices.

Khalid al-Falih said the deal could be run for another three to six months beyond the end of June.

Financial Times

Under the terms of the existing accord, Opec members and countries outside the cartel, including Russia, agreed to cut their output by about 1.8m barrels a day throughout the first half of 2017.

A preliminary agreement to extend the deal had been reached by most, but not all, producers, he said.

“Consensus is building, but it is not done yet,” Mr Falih told reporters on the sidelines of an energy industry event in Abu Dhabi. “We are still in consultations.”

The remarks from Opec’s de facto leader represent the clearest signal yet that the group seeks to extend the deal in order to curb stubbornly high inventories and bring to a close the biggest oil downturn in a generation.

The oil price crash that started in 2014 battered the economies of producer nations and roiled the share prices of energy companies.

Global oil prices staged a slight recovery following the comments after falling by more than 4 per cent on Wednesday. Brent, the international benchmark, edged 43 cents higher to $53.36 a barrel. West Texas Intermediate, the US marker, rose by 36 cents to $50.80 a barrel in mid-morning trading in London.

The status of global oil stocks would determine any extension at the next meeting of Opec ministers on May 25, Mr Falih said on an earlier televised discussion among the six Gulf oil ministers on Sky News Arabia.

“Our target is the level of inventories as an indicator of the success of our initiative,” he said.