OPEC organization on May 25 local time, a semi-annual meeting was held in Vienna. Whether to extend the production cut agreement that will be implemented in January this year became the focus of the meeting. According to Reuters , citing an OPEC representative, the organization reached a agreement at the meeting to extend the production cut agreement for nine months until March 2018.
Reuters also reported that more than a dozen other oil-producing countries represented by Russia will most likely support the decision. The two sides will meet in Vienna on the afternoon of the 25th local time. After the
news, both the United States and WTI Brent crude oil futures fell by more than 1%.
At the end of November last year, OPEC oil-producing countries and non-OPEC oil-producing countries represented by Russia reached a production cut agreement, agreeing to cut production by 1.8 million barrels per day at the beginning of 2017 for a period of six months.
Although the execution rates of many oil-producing countries participating in the production cut agreement were good, which once supported the rise in oil prices, the increase in production of US shale oil is a lingering downward factor in oil prices, putting oil prices under pressure.
Analyst of GF Futures Energy Group Yao Xi previously told a reporter from 21st Century Business Herald that if the US shale oil growth rate is fast, it will curb oil prices. Judging from the current inventory reduction level, if OPEC implements production cuts by the end of this year, inventory will return to the five-year average. If it can be extended for more time, it will also drive oil prices to rise. The oil price next year still depends on the development trends of US shale oil. After the oil price reaches more than US$60 per barrel, if US shale oil production increases rapidly, OPEC's execution rate of production cuts may also decline, which will curb the rise in oil prices.
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