Oil producers chose to extend supply cuts of 1.8mb/d for nine extra months, amidst a global glut of crude and rising US shale gas production, which saw prices more than half in the past three years, Normangee Star reported.
In addition to the members of the Organization of Petroleum Exporting Countries (OPEC), the cuts are going to be shared by a dozen non-members led by Russia, which reduced output in tandem with OPEC from January.
Libya and Nigeria will remain exempted from the output curbs as they restore lost production, according to Saudi Oil Minister, Khalid Al-Falih.
As informed on Reuters, oil prices tumbled 5% late May as the extension of output curbs disappointed investors, who had hoped for larger cuts, leading to the biggest daily percentage slide in crude prices since early March.
Mizuho Americas’ Director of Energy Futures, Robert Yawger, stated, “There was hope that there would be half a million extra barrels coming off.”
The cartel will next meet in November 2017.