The Associated Press VIENNA (AP) — The OPEC cartel and a group of allied oil-producing nations agreed Thursday to extend crude output cuts until the end of next year, continuing a policy that led to a significant rise in the price of oil over the past year.
At the same time, the 24-nation alliance led by OPEC member Saudi Arabia and Russia gave notice that it stands ready to revisit the move if price increases bring U.S. shale operators — who suspended operations while crude was cheap — rushing back into the market.
“We are going to be agile, depending on how events unfold,” Saudi Arabian oil minister Khalid Al-Falih told reporters. Announcing the extension decision after a day of meetings, he declared, “it’s been a great day.”
The success of the reduced output strategy has been reflected by crude’s rise. Benchmark oil prices are now close to $60 a barrel, depending on the grades, up almost 20 percent from a year ago. On Thursday, the U.S. contract was trading at $57.08 a barrel, down 22 cents on the day.
That partly reflects a rise in global economic growth since last year. But it also has been attributed to the OPEC-led decision to limit production, renewing the cartel’s reputation as a major player in controlling the oil market.Speech