Oil Producers' Output Cut Deal to Reduce Market Volatility - Novak

Russian Energy Minister Alexander Novak said that the agreement to cut output by the Organization of the Petroleum Exporting Countries (OPEC) and a number of oil producers will speed up the stabilization of the market situation, reduce volatility and will provide an opportunity to attract investment and secure a development of the oil sector.

VIENNA (Sputnik) — The deal to cut output by the Organization of the Petroleum Exporting Countries (OPEC) and a number of other oil producers will reduce oil market volatility and spur investment in the industry, Russian Energy Minister Alexander Novak said Saturday.

Oil-rich OPEC and non-OPEC countries struck a historic deal on Saturday for the latter to reduce oil output by around 600,000 barrels per day in the wake of November's OPEC agreement to cut production by 1.2 million barrels per day.

"The agreement signed today will speed up the stabilization of the market situation, reduce volatility and will provide an opportunity to attract investment and secure a stable development of the oil sector," Novak said after the deal was closed.

Novak also stated that the deal between the OPEC and other oil producers to cut oil output may be extended beyond the first half of 2017.

"Regarding the possibility of extending the agreement into the second half of the year, I think that there is such a possibility, it is embedded in the deal signed today. We agreed for six months with a possibility of extending it for another six months," Novak said after the deal was closed.

The cuts will take October's production level as the point of reference, according to the minister.

Countries taking part in the deal should not be concerned with the possibility of the United States resuming fracking development, instead focusing on rebalancing the market, he added.