Date for next OPEC meeting set for November 30

Owen Stevens
June 5, 2017

Oil prices weakened on Friday, prompting a move away from riskier assets and depressing Asian stocks, after an OPEC agreement to extend cuts in crude production for a further nine months disappointed investors who had bet on bigger output cuts.

The bright outlook for wandering U.S. motorists is thanks to oil prices, which slipped further on Friday following an OPEC-led decision to extend current production curbs that investors gauged did not go far enough to reduce a global supply glut.

U.S. West Texas Intermediate or WTI Crude futures were trading 0.45 percent higher at $49.12 on the New York Mercantile Exchange as of 5.55 am EDT.

In spite of OPEC and Russia's output cuts, oil stockpiles in the United States and other major economies remain rather obstinately high - never mind the impatient investors, that's causing all sorts of problems.

The 14 OPEC Member Countries and 10 participating non-OPEC producing countries emphasized the importance of continuing efforts to stabilize the oil market in the interest of producers and consumers.

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Analysts criticized OPEC for failing to slash oil production which led to the falling prices of oil.

"OPEC officials prefer ... to wait and see the impact of an extension in helping rebalance the market prior to taking any more drastic actions", he said.

The price rise this year has spurred growth in the USA shale industry, which is not participating in the output deal, thus slowing the market's rebalancing with global crude stocks still near record highs. US crude sank almost 4.8 percent on Thursday on disappointment that OPEC and the other producers weren't more aggressive in extending their output cuts. A combination of growing American shale oil production and continually high global oil inventories caused traders to lose faith in OPEC's production cap.

The world's major oil producers have voted to continue their production cuts into 2018 in an attempt to prop up the oil price. American oil production has risen over 6% since the start of the year. The day's volumes of 1.1 million contracts of WTI were the highest since the November 30 session, when OPEC first announced cuts.

Other reports by VgToday

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