The decision by oil producing countries to extend production cuts agreement by nine months gives the market much needed visibility until at least 2018, the Chief Executive of French oil and gas company Total said on Friday.

The Organization of the Petroleum Exporting Countries (OPEC) and non-members led by Russia decided on Thursday to extend cuts in oil output by nine months to March 2018 as they battle a global glut of crude.

“It was a good decision. It was good because it goes beyond 6 months and gives visibility until 2018, and does not make everything dependent on the next OPEC meeting on November 30,” Pouyanne told journalists on the sidelines of Total’s annual shareholders meeting in Paris.

Pouyanne said he expected oil stocks to start reducing in the second half of the year and if that happens, markets will react accordingly.

“Between the decision and the strong demand that is expected this summer, we’ll see the stocks move, however, the U.S. production remains the unknown, as always,” Pouyanne said.

Source: www.reuters.com