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Oil prices have recently dipped despite the cuts and largely due to a revival in shale oil production in the US.
International benchmark Brent Crude rose 0.87 per cent at press time on Thursday to $52.26 a barrel after first rising past $57 and then sliding to just above $50 last week. US benchmark West Texas intermediate is still just above $49 a barrel.
OPEC in November agreed for the first time in eight years to cut output to stabilize global oil markets, but mega-producers like Saudi Arabia are now in an uncomfortable position where they may have to resort to further production curbs to balance the market.
Many experts had expected oil prices to jump to $60 in 2017. While the year is not over yet, the trend has largely been downward hovering just above $50.
Saudi Arabia accepted “a big hit” to its production and is reducing output by almost 0.5 million barrels per day. Other Gulf OPEC allies will cut by a total of 0.3 million barrels per day.
Non-OPEC Russia also agreed to trim its output for the first time in over a decade.
Russia cut output in the first half of 2017 by up to 300,000 barrels per day.
Alekperov says that November’s agreement needs to be extended.
“The result is obvious. I hope the sides will meet to find a solution,” he said, according to the Russian news agency TASS.
OPEC may be feeling the squeeze to do more to prop up prices. Most of its members are facing budgetary deficits, while countries like Venezuela, which depend on oil exports for most of their budget, have entered a period of depression and stagnation.
OPEC is due to meet for its summit in Vienna in May.
The BRICS Post with inputs from Agencies