Opec meets to talk cut extensions

The price of oil is down further after OPEC and other nations said they had agreed to extend their production cuts for another nine months.

"This is a bit tricky as production cuts cause higher prices which will incentivise more production for the US shale oil and reduce the impact of the production cuts". "Right now we are talking about nine months", he said.

Don't be fooled by today's market reaction: OPEC's widely anticipated decision in Vienna today to extend the production cuts that were agreed to back in November 2016 should prove bullish for crude oil prices.

Years of low prices forced shale producers in the country to become much more efficient, and turned them into a major market force. Iranian oil minister Bijan Namdar Zanganeh told reporters there was already apparent unanimous consent "to continue the cut that we had in November".

USA crude supplies fell 4.43 million barrels last week-more than twice the 2 million-barrel decline forecast by analysts surveyed by Bloomberg-to 516.3 million barrels, the EIA said.

"We are targeting that by the end of the extension period (nine months) we are trying to prep and finalise repairs of our infrastructure and at that time we would be able to join", he said.

US oil production has risen more than 10 percent since mid-2016 to more than 9.3 million bpd.

According to the report of JMMC, as of April 2017, the OPEC and participating non-OPEC producing countries achieved an impressive conformity level of 102 percent, a very high conformity for the oil production coalition.

As ministers gathered in Vienna for informal consultations, Saudi OPEC ally Kuwait said discussions included the possibility of deepening the cuts or prolonging them by 12 months.

"Nurturing a constructive and stable market environment is our highest priority", said Khalid Al-Faith, Saudi Arabia's minister of energy and president of the OPEC conference on Thursday.

He told a news conference he was not anxious by what he called Thursday's "technical" oil price drop and was confident prices would recover as global inventories shrink, including because of declining Saudi exports to the United States.

"If U.S. shale producers exceeded our projected increases, it'll drive the price down again", Arrington said.

OPEC chose to continue with the current level of cuts, sending oil prices lower, as that particular outcome of the OPEC meeting was expected and already priced into the oil market.

At over $50 a barrel, benchmark crude sits substantially below the highs reached in 2014, but is priced high enough to bring back into the market USA producers who eased back as prices tumbled past year.

By 1230 GMT on Wednesday, Brent crude was down around 0.2 percent at $54.03 a barrel.

"Break-evens for some of the US producers are estimated at close to $35-40 per barrel", he said. API found crude oil stocks continued to decline, but the 1.5 million barrel drop was far less than the 2.8 million barrels expected from S&P Global Platts earlier this week. Crude prices are unlikely to rise substantially - and that means the era of windfall profits appears to be over for member nations, at least for now.

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