According to the BBC, major oil producers are considering extending their recent cuts to output in a fresh bid to boost prices. Although many countries in the oil cartel, Opec, and several other oil nations started to reduce production at the start of 2017, oil prices have dropped in the last few weeks over fears that the limits would not be enough to deal with an excess of supply. As a result, a group of ministers meeting in Kuwait on Sunday agreed to review extending cuts by a further six months.
Commenting on the news, Abhishek Deshpande, an oil analyst at Natixis, told the BBC the price had fallen after oil traders became “jittery” about the market. In particular, traders were uncertain about the commitment of Russia and Saudi Arabia, Opec’s biggest member, to the cuts. The oil countries, he argued, now need to show “discipline” and cut back on production in the coming months because stocks are still too high. Certainly, the chances remain high for an extension to supply cuts.
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