Oil remains weak after OPEC-led out extension falls below expectations

The deal is aimed at bolstering petroleum prices, which have remained relatively flat as US shale oil producers turned on the spigot to make up for reduced OPEC output.

The Organization of Petroleum Exporting Countries agreed in November to cut output by about 1.2 million barrels a day.

Commenting on the issue, Dr. Diran Fawibe, Chairman of International Energy Services Limited, disclosed in an email to Vanguard that the price of oil kept fluctuating. At over $50 a barrel, benchmark crude sits substantially below the highs reached in 2014, but is priced high enough to bring back into the market U.S. producers who eased back as prices tumbled a year ago.

However, Kachikwu, in an interview with Bloomberg TV ahead of the meeting, said Nigeria was not opposed to joining the production cuts in a bid to prop up oil prices.

The price rise this year has spurred growth in the U.S. shale industry, which is not participating in the output deal.

Oil weakened after OPEC was said to agree to extend output cuts for another nine months, disappointing investors who had hoped for more.

The next Opec and non-Opec meeting is scheduled for Nov 30, delegates said.

In December 2016, OPEC and non-OPEC producers reached their first deal since 2001 to curtail oil output jointly and ease a global glut after more than two years of low prices.

The energy minister of Russian Federation has underlined how global oil producers still have the flexibility to do more to help rebalance markets just hours after OPEC and non-OPEC members agreed to prolong their current agreement.

"Russia has an upcoming election and Saudis have the Aramco share listing next year so they will indeed do whatever it takes to support oil prices", Reuters news agency quoted Gary Ross, head of global oil at PIRA Energy, as saying.

"Nine months was priced", said Amrita Sen, analyst at consultancy Energy Aspects. Non-OPEC producers including Russian Federation also agreed to cut production through March, said Bijan Namdar Zanganeh, Iran's minister of petroleum, according to Bloomberg.

OPEC said its decision is meant to rebalance market conditions and accelerate the draw downs on global crude inventories, which so far has proven to be a hard task. The joint OPEC-Russia efforts, however, were somewhat undermined by growth in the shale industry of the U.S., which did not take part in the deal.

  • Zachary Reyes