Major oil producers agree to extend output cuts by nine months

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"It's likely we'll be balanced earlier than later".

"We have to wait and see that the militancy effects are out and the infrastructure is rebuilt and we're back to production", he said.

Yesterday, Brent crude oil fell more than 1pc to around $53 per barrel as markets were disappointed Opec would not deepen the cuts or extend them by as long as 12 months.

"Medium term, we remain positive on the oil price and forecast the price on Brent crude to average USD60/bl in 2018 on the back of a lower United States dollars and somewhat tighter oil market", Danske argues.

However, "if they can keep prices in this range until demand picks up, and not suffer too much, maybe they can push prices to $70 and even $80 in a few years", he added. On May 24, 2017, prices are near a one-month high due to the possible extension of the production cut deal.

Oman, the largest non-OPEC producer in the region supports to extend the agreement and will continue to cut production by almost 4.5 percent if the deal goes through. That's similar to last year's accord which included the option for an extra six months.

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 US onshore drillers make plans" to further increase their production. "If this is approved, Iraq will comply", he said.

Oil prices were higher in European trading on Thursday, touching a fresh five-week high ahead of an OPEC meeting later in the global day. But quite frankly when we do, the pressure is going to get on for us to join the cut team. "On a positive note, on an optimistic note, lots of us hope we can crawl back to $60".

Last year, the oil cartel made a decision to reduce crude production by 1.8 million barrels a day to offset the global oversupply for the first six months of this year. The historic pact affected everything from the valuations of USA shale producers to the foreign exchange rates of energy-dependent nations such as Brazil and Nigeria.

OPEC has for weeks been laying the groundwork to extend production cuts.

The Organization of Petroleum Exporting Countries agreed in November to cut output by about 1.2 million barrels a day.

The OPEC meeting is expected to start, after 0820 GMT, according to a preliminary schedule, followed by a joint gathering with non-OPEC after 1320 GMT. "The market is big enough to absorb the expected increased production in shale in 2017", he said.

That's due to USA shale producers. "Now they have to move to other areas". As Middle East nations including Saudi Arabia bear the majority of the mandated output curbs, the regional benchmark Dubai crude has strengthened versus U.S. West Texas Intermediate, making oil linked to WTI attractive to buyers.

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