OPEC, Russia Agree To Extend Cuts In Oil Output To Help Boost Prices

The OPEC cartel and its partners, including Russia, say they have agreed to cut oil production further as part of efforts to boost prices while global supplies rise amid a worldwide economic slowdown

However, some doubts remain about the long-term effectiveness of the cuts agreed by the so-called OPEC+ group on December 6, with other nations not linked to the group -- including the United States -- continuing to pump oil products to the marketplace.

Russian Energy Minister Aleksandr Novak said from Vienna after the OPEC+ meeting that "we have decided to reduce production by 500,000 barrels a day through the first quarter of next year."

Those cuts will come on top of a reduction of 1.2 million barrels a day that the group has been mostly observing the past three years.

To reach the accord, the nations had to overcome disagreement over how to share the cuts among the 14 OPEC countries and non-cartel members, such as Russia, the world’s second-largest oil producer.

Saudi Arabia has been carrying out the largest share of production cuts, but Russia and others, including economically ailing Iraq and Nigeria, have been pumping more than expected and reducing the impact on the overall market.

Despite some skepticism over whether all nations will comply with the cuts, oil prices did jump on the marketplace.

The price of oil had gained in recent days in expectation of the output cut, but after the announcement, the benchmark Brent crude price jumped 86 cents to $64.25 a barrel.

The new accord sets the output target at 1.7 million barrels a day, lower than the level of October 2018.

Between them, Saudi Arabia and Russia will make nearly half the additional reductions.

Iraqi Oil Minister Thamer Ghadban told reporters that "what will happen during the first quarter [of 2020] will be assessed during an extraordinary meeting" of OPEC and its partners in early March.

He suggested the cuts could be extended until the end of 2020 but that it was "too early to say now".

Countries not in the OPEC+ grouping were not part of the deal, and increased output from those nations could weaken the impact of the output cuts.

Oil production in the United States -- the world's biggest producer in 2018 -- Brazil, and Canada is at record levels, while Norway plans to increase its production as well.

With reporting by AP, AFP, and TASS