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>> Global oil prices gaining Monday after Saudi Arabia and Russia, the world's two largest oil producers, agreed to extend a deal to cut output. Reuters Andy Critchlow says the announcement took investors somewhat by surprise>> It's quite a strong worded statement, they said that they will do whatever it takes to rebalance the oil market.
Will this do it? Well at the moment, it's just rhetoric. But there's lots of questions about whether this means production, whether it means exports, whether there will be full compliance. I mean, OPEC has done very well so far sticking to its commitments. Will that hold for another year?
>> Saudi Arabia the de facto leader of OPEC and Russia together control a fifth of global supplies. Their deal comes just as OPEC and non-OPEC countries prepare to meet towards the end of the month in Vienna. But higher outputs from the United States is throwing OPEC's efforts to cut production and support prices into turmoil.
>> There's just too much oil in tanks or floating on tankers around the world still. And that's gonna take an awful long time to wash out of the system. In February, US production went back above nine million barrels per day, that's crude, that's liquids. They've added 500,000 barrels since last September.
What OPEC takes away, America gives back in terms of oil. Higher prices have obviously been a catalyst for more drilling onshore in the US.>> OPEC's desire to have greater market share and higher prices isn't sustainable, while output from the US continues to rise.