OPEC agrees to extend oil production cuts

OPEC agreed on Thursday to extend its oil production limits for at least the next nine months as a way to ensure higher crude prices.

Delegates at an Organization of the Petroleum Exporting Countries (OPEC) gathering in Vienna decided to maintain the production cuts they initially implemented late last year, Reuters reports. 

Members of the 13-country organization, as well as a dozen non-members including Russia, will likely abide by the output limits, according to Reuters.

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OPEC initially decided to cut production levels last December, when a sustained global supply glut and increasing production from non-OPEC members — including the United States — caused oil prices to sag. A barrel of crude oil cost over $100 in July 2014; by February 2016, the price briefly dipped below $27. 

The December agreement — when OPEC producers decided to cut output by 3.7 percent, to 32.5 million barrels per day — was the first production limit instituted by OPEC since 2008. In the months that followed, prices rose to over $58 per barrel. 

Crude oil Brent prices — the global benchmark — fell below the $50 mark again earlier this month as oversupply issues persisted, due in part to higher production from non-OPEC members. 

Despite OPEC’s decision to maintain its output cuts, Brent crude prices fell on Thursday because investors had hoped for deeper and longer production limits. West Texas Intermediate, the U.S. benchmark, fell by more than 1 percent in morning trading, as well.