Opec extends 1.8m barrel daily cut in oil production

The extended reductions are likely to be carried out once again in tandem with a dozen non-members led by top oil producer Russian Federation, which reduced output with the Organization of the Petroleum Exporting Countries from January.

OPEC's cuts have helped push oil back above $50 per barrel this year.

Opec and its non-member partner countries today reached a deal to roll over their output cuts for another nine months, a widely expected decision aimed at showing their commitment to speed up the reduction of the world's oil glut. The curbs were meant to last six months from January, but confidence in the deal, which boosted prices as much as 20 per cent, waned as inventories remained stubbornly high and USA output surged. But dogged by fierce competition from the USA shale boom and excess supply, they extended the cuts through March 2018.

Brent, the global oil marker, was down 58 United States cents at $53.37 a barrel, partly on disappointment the cuts had not been increased in size or extended for even longer.

The cost of a barrel of Brent crude, which is a global benchmark for oil value, plunged by nearly 5% after the announcement.

Kachikwu said, "Certainly, I support the nine months' (extension) straight up because I think it gives a longer gestation period to see how prices move, how stocks stay, and how the reserves in most countries are holding up".

OPEC members typically do not comply with quota agreements, and USA shale producers are likely to continue flooding the market, according to Tortoise Capital Advisors.

OPEC president, Khalid al-Falih who is Saudi Arabia's Energy minister, on Thursday officially welcomed Equatorial Guinea's Mines and Hydrocarbons minister, Gabriel Obiang to group at the 172nd OPEC meeting in Vienna.

IEA has recently released data for changes in oil revenue from Q4 2016 to Q1 2017, according which Iran has topped OPEC nations like Saudi Arabia and Iraq in terms of positive changes in oil revenues. However, there does exist a counter argument based on future levels of production.

Reuters later also reported the news, citing delegates.

OPEC sources have said the Vienna meeting would highlight a need for long-term cooperation with non-OPEC producers.

The group could also send a message to the market that it will seek to curtail its oil exports.

"The most important issue is to regulate and stabilise the market. and bring inventories down to their five-year average" Martinez told reporters. "We expect substantial drawdown in oil inventories in the second half of the year".

  • Zachary Reyes