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Oil Prices Sag Despite Production Cut Extension
Oil futures dropped 5% on Thursday, signaling trader skepticism about the impact of an OPEC-led plan to continue production cuts for another nine months.
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Oil futures dropped 5% on Thursday, signaling trader skepticism about the impact of an OPEC-led plan to continue production cuts for another nine months.
The U.S. benchmark, West Texas Intermediate, fell $2.58 to close at $48.78 per barrel. Brent crude, the international standard, lost $2.60 to close at $51.36.
The decline followed Thursday's decision by the 13 members of the Organization of the Petroleum Exporting Countries and 11 other oil-producing nations, to maintain a cutback of 1.8 million barrels per day that began in January.
Analysts opine that traders were hoping for deeper cuts that would drain the global oil glut more quickly. But OPEC, led by Saudi Arabia, has struggled all year to coax participating countries into honoring their pledges to the original reductions, which equal about 2% of global petroleum production.
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