OPEC and its allies extended oil production cuts for nine more months after last year’s landmark agreement failed to eliminate the global oversupply or achieve a sustained price recovery, Bloomberg reports.
The producer group together with Russia and other non-members agreed to prolong their accord through March, Bijan Namdar Zanganeh, Iran’s Minister of Petroleum, said in Vienna. No new non-OPEC countries will be joining the pact, while 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.
Six months after forming an unprecedented coalition of 24 nations and delivering output reductions that exceeded all expectations, resurgent production from U.S. shale fields has meant oil inventories remain well above the level targeted by OPEC ministers. The market however did not appear convinced with the extension. Benchmark Brent crude traded at $52.42 a barrel as of 4:43 p.m. in London, down 2.9 percent, after earlier sliding 3.2 percent.