OPEC and Russia are ready to extend their oil production cuts until the end of next year to ensure global stockpiles keep falling and prices maintain recent gains.

All OPEC members and Russia, the biggest producer outside the group to join the deal, agree the cuts should last until the end of 2018, according to delegates in Vienna to attend Thursday’s meeting. On Wednesday, a committee charged with overseeing the agreement on behalf of the whole group also recommended extending until the end of next year, two delegates said.

"Everybody’s working toward that nine-month extension,” Nigerian Petroleum Minister Emmanuel Kachikwu said in a Bloomberg television interview.

Eoin Treacy's view

OPEC’s strategy to restrict supply in order to raise prices took more than a year to reduce excess inventories and improving global growth has certainly helped to achieve that goal. Surging supply from domestic onshore US sources continues to represent a challenge and not least as exports pick up. That has ensured the run-up in prices has not been more aggressive.

Medium-term there is a lot of oil outside of OPEC not least in the USA, Canada and Brazil that is economic at somewhat higher prices. The big question is whether rising interests will have an influence on how long it takes for shale drillers to ramp up drilling in 2018. Nevertheless, supply will be brought back on line one way or another if higher prices are sustained beyond the short term.

In the meantime, the Brent Crude price continues to hold the break above $60. A sustained move below that level would be required to question potential for additional upside.