Oil prices stabilise as Riyadh indicates output cut extension

The price of crude stabilised early on Monday after Saudi Arabia's oil minister said he is "confident" that leading oil producers will agree to extend an output cut into the second half of 2017.

The cut, which was initiated by oil cartel OPEC and several non-OPEC nations to ease a market glut, is set for review on May 25.

"Based on the consultations I have had with participating members I am rather confident the agreement will be extended into the second half of the year and possibly beyond," Saudi Oil minister Khalid al-Falih said at the Asia Oil and Gas Conference in Kuala Lumpur.

"The producer coalition is determined to do whatever it takes to achieve our target of bringing stock levels back to the five-year average."

Despite United States' rising shale output having slowed the impact of OPEC and its partners' cuts, producers are optimistic that the global market will soon be stabilised again.  

Al-Falih's words on Monday are the first indication that Saudi Arabia has given that the production cap may be extended beyond 2017.

Riyadh, which is currently attempting an ambitious plan to move its economy away from reliance on oil exports, has made deeper cuts than what it had agreed with OPEC.

The cuts have caused Saudi Arabia to cede some of its market share to economic and political rivals Iran and Iraq.