Oil steady ahead of Opec meeting

The move kept global oil stockpiles near record highs, forcing the Opec first to suggest extending cuts by six months, but later proposing to prolong them by nine months, and Russian Federation offering an unusually long duration of 12 months.

Regardless of the size of this increase the market tends to react with a knee jerk and prices fall, just like they rise whenever an OPEC official says the output cut deal will be extended.

The first phase of the production cuts deal was reached late a year ago to control free falling oil prices that brought a massive trade deficit for oil dependent economies.

Emmanuel Kachikwu, minister of state for petroleum resources, says that Nigeria is not opposed to joining OPEC production cuts but that would only happen when the country is back to full production.

USA oil production C-OUT-T-EIA has already risen by more than 10 percent since mid-2016 to over 9.3 million bpd as drillers take advantage of higher prices and the supply gap left by OPEC and its allies.

WATCH: Can OPEC still control the oil market? .

The market is largely pricing in a 9-month roll over of Opec and non-Opec cuts, with Russian Energy Minister Alexander Novak and Al-Falih due to hold a join briefing at 4pm BST.

The decision, announced Thursday by a high-level meeting of OPEC and non-OPEC ministers, means that the reductions of 1.8 million barrels a day agreed on in November will stay in place until March.

News of the nine-month extension starting emerging when Khalid Al-Falih, Saudi Arabia's energy and industry oil minister told CNBC, "Nine months with the same level of production that our member countries have been producing at is a very safe and nearly certain option to do the trick".

The group could also send a message to the market that it will seek to curtail its oil exports, which have not declined as steeply as its production.

Falih told reporters at the start of the meeting at the headquarters of OPEC that this was "almost certain.to do the trick". Global crude oil inventories are above their five-year average or above 3 billion barrels. "Then, the fourth quarter will get us to where we want".

Falih is not anxious that higher oil prices helped rival shale oil producers in the United States to increase their output and slow down the reduction in inventories.

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