After OPEC deal, Texas oil regulator boasts of victory

OPEC and non-OPEC oil producers are attending the 172nd OPEC meeting in Vienna to discuss the possibility of extending the oil production cut, possibly by as long as 12 months, to help clear a global inventory overhang and to support crude prices.

The earlier decline in oil price, which started in 2014, forced Russian Federation and Saudi Arabia to tighten their belts and led to unrest in some oil-producing countries, including Venezuela and Nigeria.

US oil production C-OUT-T-EIA has already risen by more than 10 percent since mid-2016 to over 9.3 million bpd as drillers take advantage of higher prices and the supply gap left by OPEC and its allies.

However, ministers from countries such as Iran, Iraq and Kuwait told reporters that nine months is the most realistic scenario.

Oil prices settled sharply lower Thursday, as investors were disappointed about the Organization of the Petroleum Exporting Countries' (OPEC) decision to extend production cuts by nine months. The move has also been viewed as a driving force behind renewed USA exploration activity in unconventional oil fields.

"We haven't had any impact of the OPEC production cut". A group of non-OPEC producers, including Russian Federation, are also expected to maintain their commitment to the production caps.

The cuts are likely to be shared again by a dozen non-members led by top oil producer Russian Federation, which reduced output in tandem with OPEC from January.

The alliance between OPEC and non-OPEC countries faces competition from USA shale producers.




He added that OPEC members Nigeria and Libya would still be excluded from cuts as their output remained curbed by unrest.

That said, we maintain a neutral stance on the oil price near term and highlight important downside risks from a potentially more hawkish Federal Reserve, which is set to meet in June.

More than 400 oil rigs are now working USA shale fields " an increase of more than 120 percent compared to a year ago.

The global glut of supply has proved hard to draw down even after OPEC agreed to cut production in the first half of the year.

OPEC said its decision is meant to rebalance market conditions and accelerate the draw downs on global crude inventories, which so far has proven to be a hard task.

Addressing the delegates before the meeting, al-Falih said: "We have more work to do in lowering inventories toward the last five-year average, but we are on the right track". "Then, the fourth quarter will get us to where we want".

Already, Saudi Arabia and Russian Federation, a non-OPEC state - both world's top two oil producers - have agreed on the need to prolong the current cuts until March 2018.

"Everyone is watching (the price of oil) with trepidation, not jubilance", said David Arrington, president of shale oil producer Arrington Oil & Gas in Midland, Texas.

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