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OPEC extends oil cuts for nine months [PHOTO]

25 May 2017 16:38 (UTC+04:00)
OPEC extends oil cuts for nine months [PHOTO]

By Sara Israfilbayova

The Organization of Petroleum Exporting Countries (OPEC) agreed to extend oil production cuts for nine months to March 2018.

Ministers from OPEC and its allies met in Vienna on May 25, to decide whether to prolong the agreement reached in November 2016. Major producers including Saudi Arabia, Russia and Iraq favored an extension for nine months, Reuters reported.

Saudi Arabian Energy Minister Khalid Al-Falih insisted the cuts are working, saying stockpile reductions will accelerate in the third quarter and inventory levels will come down to the five-year average in the first quarter of next year. While he expects a “healthy return” for U.S. shale, that won’t derail OPEC’s goals.

Libya and Nigeria will remain exempt from the output curbs as they restore lost production, according to Al-Falih.

Nigerian Oil Minister Emmanuel Kachikwu said earlier in an interview that extending the deal would bring price stability, suggesting a “$50 floor” for oil if producers stick to their cuts.

The price rise this year has spurred growth in the U.S. shale industry, which is not participating in the output deal, thus slowing the market's rebalancing with global crude stocks still near record highs.

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

OPEC members decided to cut production by 1.2 million barrels per day. Some non-OPEC countries, such as Russia, Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Sudan, and South Sudan promised to cut output by 600,000 barrels per day.

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OPEC extends oil cuts for nine months [PHOTO] - Gallery Image
OPEC extends oil cuts for nine months [PHOTO] - Gallery Image
OPEC extends oil cuts for nine months [PHOTO] - Gallery Image
OPEC extends oil cuts for nine months [PHOTO] - Gallery Image
OPEC extends oil cuts for nine months [PHOTO] - Gallery Image
OPEC extends oil cuts for nine months [PHOTO] - Gallery Image
OPEC extends oil cuts for nine months [PHOTO] - Gallery Image
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