Oil output cuts could be extended beyond 2017: Al-Falih

The six-month agreement between OPEC and non-member oil producers to trim crude production could be extended into the second half of the year and potentially into 2018, Saudi energy minister Khalid Al-Falih said Monday at a conference in Malaysia, agencies reported.

OPEC agreed with non-member oil producers in December last year to cut output by a combined 1.8 million barrels per day, in order to shore up prices and ease a global oversupply.

While the deal helped boost prices, gains have been capped by growth in US shale output.

Nevertheless, producers are determined to reduce the inventory glut, Al Falih said, adding that he expects the global oil market to soon return to a “healthy state,” Bloomberg reported.

"Based on the consultation I have had with participating members, I am rather confident that the agreement will be extended into the second half of the year and possibly beyond and that includes consultations I have had this morning with the Malaysian prime minister," he said.

The producer group is determined to do "whatever it takes to achieve our targets and [bring] stock levels back to the five-year average,” the minister added.

OPEC and non-members are expected to arrive at a decision on extending production cuts at the cartel’s upcoming meeting in Vienna on May 25.

Oil prices gained following Al Falih’s comments, with global benchmark Brent crude last up 0.8 percent at $49.47 per barrel (bbl), while West Texas Intermediate (WTI) rose 0.6 percent to $46.51/bbl.