25 de mayo de 2017, 14:04Vienna, May 25 (Prensa Latina) OPEC and other oil-producing countries have agreed to extend the supply cut agreement for nine months until March 2018 in order to re-balance the market.
"Nevertheless, we continued relations, but we should be more accurate", Minister Jabbar al-Luaibi told Rudaw Thursday in Vienna while participating in the OPEC meeting. But any uptick in prices may be modest and temporary.
Competition from the U.S. shale has toughened and is threatening OPEC's monopoly.
The price for Brent crude oil was about $53 per barrel at 6 a.m. EDT and moving lower from the previous close. That, in turn, is increasing supply and keeping a lid on price gains.
"Some market participants may have expected either a deeper cut, a longer one, inclusion of more countries, or other such icing on the cake", the bank said. They also discussed steps for shrinking the USA central bank's $4.5 trillion in bond holdings.
Ann-Louise Hittle, vice president at energy consultancy Wood Mackenzie said that the "decision in Vienna sends a signal of continued support for oil prices from OPEC which helps U.S. onshore drillers make plans" to further increase their production.
Most investors had already factored in this outcome as Saudi Arabia and Russian Federation earlier in May that a nine month extension was needed, but some had bet on the producers agreeing to bigger reductions in supplies. A continuation of the earlier level of cuts was perhaps the minimum they were expecting.
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Falih dismissed the market reaction on Thursday, noting that world economies are growing and continue to depend largely on crude as their lives' blood.
Now however, oil stockpiles of 3 billion barrels - 300 million above the five-year average -are keeping prices low, even as production is cut.
Analysts criticized OPEC for failing to slash oil production which led to the falling prices of oil.
"This is partly because crude had already run higher in anticipation of the deal, partly because some analysts had been hoping for a deeper cut and partly because U.S. shale oil production is surging again, encouraged by crude's advance from its lows under $30 in early 2016", he said.
Crude prices were on the defensive on Friday after an agreement by oil cartel Opec to extend existing supply curbs disappointed investors wagering on larger cuts, prompting a move away from riskier assets and depressing Asian stocks.
WTI Crude Oil (Nymex) for June, tumbled 4.79 percent to settle at United States dollars 48.90/barrel.