Malaysia pledges to cut oil production by 20000 barrels per day

Nigeria and Libya will remain exempt from making cuts and Iran, which was allowed to increase production under the original accord, retains the same output target, said Kuwait's Oil Minister Issam Almarzooq.

West Texas Intermediate for July delivery was at $48.57 a barrel on the New York Mercantile Exchange, down 33 cents, at 1:30 p.m.in London.

The problem for OPEC is that while crude sits substantially below the highs of around $100 a barrel reached in 2014, it is high enough to bring back into the market USA producers who eased back as prices tumbled previous year. "But all indications discovered that a nine-month extension is the optimum", he said.

Hamid stated that only decisive action from OPEC will boost prices from current levels, which is constantly facing the challenges of increasing USA shale output.

On the other hand, India, the third largest consumer of oil, is contemplating importing oil from United States and Canada if OPEC countries continue the output cut.

Crude prices were on the defensive on Friday after an agreement by oil cartel Opec to extend existing supply curbs disappointed investors wagering on larger cuts, prompting a move away from riskier assets and depressing Asian stocks.

Oil prices have dropped after the Organization of Petroleum Exporting Countries (OPEC) announced plans to extend output cuts by a further nine months. With the increase in the prices and production of the shell gas things have become hard for the oil producers, as their efforts to maintain the balance gets slower after this activity.

Brent crude oil settled down $2.50, or 4.6 percent at $51.46 a barrel.

Dave Pursell, managing director at Tudor, Pickering, Holt & Co, a Houston-based bank working with US shale producers, predicted markets would rebalance within six months.

"OPEC looks at shale and it scoffs", said Dave Purcell of Tudor, Pickering, Holt & Co, a US shale investment bank that attended the OPEC meeting for the first time.

Competition from the USA shale has toughened and is threatening OPEC's monopoly.

USA oil production has already risen by 10 percent since mid-2016 to over 9.3 million bpd, close to the output of top producers Russian Federation and Saudi Arabia.

OPEC meets again in November to reconsider output policy.

Rising U.S. production could completely replace OPEC's output cuts of 1.2 million bpd by year-end, according to RBN Energy. The pre-announcement of the scope of the deal by the oil ministers of Saudi Arabia and Russian Federation also contributed to the fall along with other rumors of extended cuts and more countries joining the initiative.

  • Leroy Wright