OPEC announces further production cuts


OPEC, the oil exporters' group, decided to extend output restrictions until March at its meeting in Vienna today.

The group was discussing whether to extend the oil production reductions agreed last year and due to expire at the end of June, alongside delegates from some oil suppliers outside OPEC.

Two key players had already stated that they want to extend the existing limit for nine months, until March next year: OPEC's biggest producer, Saudi Arabia, and Russia, the biggest exporter outside the organisation.

At their last meeting at the end of November, OPEC and 11 non-members, including Russia, agreed to cut output by about 1.8 million barrels per day in the first half of 2017. The decision initially pushed oil prices above US$50 per barrel.

However, rising fracking production in the US, combined with weak demand in China, have since led to dropping prices.

A supermarket price war on petrol has been raging in the UK, with prices of Brent Crude per barrel dropping to a five-month low of less than US$48 a barrel at the start of May. The price of Brent Crude was US$51.23 a barrel as of 30th May.

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