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OPEC, Other Oil Producers Agree To Extend Output Cuts

Russia's Energy Minister Aleksandr Novak (left) and Saudi Arabia's Energy Minister and OPEC conference President Khalid al-Falih in Vienna on May 25

OPEC together with Russia and other nonmembers have agreed to extend cuts in oil output by nine months in an effort to bolster prices on world markets.

The decision, made on May 25 at a meeting in Vienna, will mean cuts of 1.8 million barrels a day will remain in place through March.

A previous deal was due to expire on June 30.

However, oil prices declined after the announcement, with oil analysts saying some traders had hoped for deeper cuts or a longer extension.

"We considered various scenarios from six to nine to 12 months and we even considered options for higher cuts," Saudi Energy Minister Khaled al-Falih said.

OPEC members agreed in November to cut production by 1.2 million barrels a day. Nonmembers including Russia and Kazakhstan later joined the deal, bringing the total supply reduction to about 1.8 million.

At around $50 a barrel, benchmark premium crude prices are up from lows below $30 reached in early 2016. But prices are still around half the levels reached in 2014.

The recent higher prices have enticed U.S. shale oil producers to increase output by nearly 1 million barrels a day, offsetting some of OPEC's cuts.

Based on reporting by Reuters, AP, and AFP