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Kuwait backs extension of oil cuts

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Kuwait joined Saudi Arabia and Russia in supporting an extension of oil-output cuts by Opec and other global producers through the first quarter of 2018 to help trim global stockpiles.

Extending the cuts at already agreed-upon volumes is needed to reach the goal of trimming global stockpiles to the five-year average, Kuwait’s Oil Minister Issam Almarzooq said in an emailed statement on Tuesday.

“There are positive signals that have started to show, as April and May monthly reports are showing that global stockpiles have fallen significantly,” Almarzooq said.

Russia and Saudi Arabia, the largest of the 24 producers that agreed to cut output for six months starting in January, said on Monday that they favor a nine-month extension of the reductions. Oman, a non-Opec producer like Russia, expressed support the same day for curbs to continue until the end of March. Opec is due to meet with fellow producers on May 25 to decide on the extension. Surging US output has raised concern that the cuts are failing to reduce a glut. Oil has surrendered about half its gains since the producers’ accord to cut output late last year.

Members of the Organization of Petroleum Exporting Countries agreed in November to cut 1.2 million barrels a day of oil production. Several non-members, including Russia, agreed in December to contribute a combined 600,000 barrels a day of output reductions.

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Amid the cutbacks, production in the US, which isn’t part of the agreement, has risen to the highest level since August 2015. But US crude inventories are finally showing some signs of shrinking, falling for the past five weeks from record levels at the end of March.

The deliberations come as two Opec members exempt from the cuts boost output. Libya’s crude production has risen to more than 800,000 barrels a day, the most since 2014, while Nigeria’s 200,000-barrel-a-day Forcados pipeline is ready to export again after almost continuous halts since February 2016. It’s unclear whether the countries would still be exempt if the deal is prolonged.

The dollar, meanwhile, weakened for a fifth straight day and the euro soared to the highest since November amid a report US President Donald Trump revealed classified information to a Russian diplomat. Oil extended gains while stocks were mixed.

The euro jumped to the highest level since Trump’s election, while the yen also strengthened with the Mexican peso. Crude rose for a fifth day as Goldman Sachs Group Inc. said willingness by Saudi Arabia and Russia to extend output cuts will likely sway other countries to follow suit. Equities in Asia climbed, following a rally that sent the S&P 500 Index above 2,400 for the first time, while European shares slipped. Gold increased for a fourth day.

Trump’s top foreign policy advisers raced to contain political damage from a report saying he revealed sensitive classified information to Russia’s top diplomat during an Oval Office meeting last week. The president is already fending off questions about his firing of FBI Director James Comey, and the controversies are raising concerns over Trump’s ability to deliver on his economic agenda. Bloomberg

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