By Sara Israfilbayova
World prices are declining on Monday as investors assess the prospects for an increase in production in the U.S. after the extension of the OPEC+ agreement on production cut.
U.S. West Texas Intermediate (WTI) are down 0.8 percent, at $57.90 per barrel, while Brent futures are down 0.4 percent, at $63.46 per barrel, Reuters reported.
Last week, on November 30, 24 countries-participants of the agreement at the meeting in Vienna agreed to extend it for another nine months, until the end of 2018.
The decision to prolong the agreement was unanimous, Saudi Energy Minister Khalid Al-Falih said. In this case, OPEC+ may review the terms of the deal in June next year.
In addition, oil prices are supported by data of the American oil and gas service company Baker Hughes about the number of drilling rigs in the U.S. So, by the end of the week, which ended on December 1, their number increased by six units, or by 0.7 percent - to 929 units. In annual terms, the number of drilling rigs increased by 332 pieces, or 1.5 times.
“The level of production growth in the U.S. and the sustainability of world oil demand in 2018 remain the main factors of uncertainty,” the analysts of BMI Research said.
The number of drilling rigs in the U.S. increased by 2 units to 749, according to data from the oilfield services company Baker Hughes. This is the highest level since September.
The Energy Information Administration (EIA) reported that oil production in the U.S. rose to 9.5 million barrels per day in September, which was the best monthly indicator since April 2015, when oil production in the U.S. was 9.6 million barrels per day.
In November 2016, the OPEC summit was held in Vienna, where OPEC members reached an agreement on reducing oil output by 1.2 million barrels per day. In December 2016 was a meeting of oil producers outside the OPEC. Following the meeting, was signed an agreement to reduce oil production by a total of 558,000 barrels per day starting from January 2017.
OPEC and its partners decided to extend its production cuts till the end of 2018 in Vienna on November 30, as the oil cartel and its allies step up their attempt to end a three-year supply glut that has savaged crude prices and the global energy industry.
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