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OPEC and Russia are now nearing a deal to prolong their oil production cuts until the end of the next year as they showed a united front during talks at Vienna.
Russia's Energy Minister Alexander Novak anticipates OPEC and its allies to reach a consensus on Thursday to prolong their agreement to reign in oil output as indications of a growing consensus surface with the cartel's biggest producer, Saudi Arabia.
On Wednesday, Novak said they have reached in general a 'mutual understanding', stating that a decision regarding the extension is likely to be made tomorrow.
His comments were reiterated by his Saudi Arabian counterpart Khalid Al-Falih, who lauded the significant results achieved by said that more work and commitment is still needed.
The two top decision makers talked in a preparatory meeting ahead of the ministerial meeting that will be held on Thursday.
According to Kuwait's Oil Minister Issam Almarzooq told reporters following the meeting on Wednesday that a committee of ministers from major producers recommended extending the supply agreement for six to nine months after its current end-march expiry.
Oil traders are expected to assess the final communique from the Thursday meeting. If OPEC indicates that it is inclined towards a nine-month extension that would be reassessed at its next scheduled meeting in June, it would meet market expectations for a solid deal. However, it f producers only agree on a three month extension of cuts, with an option to further prolong the deal by another six months following a review, markets would be disappointed.
