Saudi energy minister Khalid al-Falih said Monday at an industry conference in Kuala 

Lumpur that he was confident that the crude oil output cut deal will be extended by six 

months or more as the market was moving towards rebalancing. 

"Based on the consultation I have had with participating members, I am rather confiden

t that the agreement will be extended into the second half of the year and possibly bey

ond  and  that  includes consultations I have had this morning with the Malaysian prime 

minister," Falih said during the opening address at the 19th ASIA Oil and Gas Confere

nce in Kuala Lumpur. 

The producer coalition is determined to do "whatever it takes to achieve our targets an

d bringing stock levels back to the five-year average." 

Falih said he was pleased that OPEC and non-OPEC partners that agreed to the supply 

cuts are so far exhibiting discipline and adherence to the commitments that were made l

ast December. 

Falih's comments come ahead of the meeting of OPEC and non-OPEC deal participants 

scheduled  to  be held in Vienna on May 25 to review the agreement and negotiate any 

extension. 

Falih also said that leading indicators showed crude supply-demand was in deficit as th

e market was moving towards rebalancing. 

"I do believe however that the worst is behind us with multiple leading indicators showing 

that  supply-demand  balance  are  clearly  in  deficit  and the market is moving towards 

rebalancing. We should therefore expect healthier markets going forward," he said. 

Falih said he was pleased to see that OECD stocks have been gradually declining since 

the middle of last year. 

"Floating stocks, for which less data is available, have also declined considerably," he a

dded. 

Markets  however  have been impacted by a combination of slow seasonal demand and 

refinery maintenance, some growth in non-OPEC supply -- especially in the US -- and th

e action of financial players in the market, he said, adding that all of this has slowed dow

n the impact of the production cuts agreed by the coalition of producers in December. 

He said he expected inventories in the US, which have been the focus of analysts, to tren

d lower on rising refinery throughput underpinned by seasonality, and on US demand sho

wing signs of continued growth in 2017.