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Analysts point to uncertainties on OPEC curb extension

Xinhua,December 01, 2017 Adjust font size:

HOUSTON, Nov. 30 (Xinhua) -- U.S. analysts on Thursday expressed concerns over the Organization of the Petroleum Exporting Countries' (OPEC) decision to extend oil production cuts for an additional nine months until the end of next year.

Jon Taylor, a professor of the Political Science Department at the University of St. Thomas in Houston, told Xinhua that "Even though something has been put into place, it wouldn't last that long."

Taylor said political and economic pressures abound, particularly "the instability in the Middle East, the war in Yemen, the whole issue of Saudi Arabian stability, let alone what we are finding in Iraq and Iran. It can't last forever."

The 173rd Meeting of the OPEC Conference concluded in Vienna on Thursday with the expected decision to extend the OPEC production cuts.

The deal, which cuts 1.8 million of oil production barrels per day, will be in place until the end of 2018.

Meanwhile, the 3rd OPEC and non-OPEC Ministerial Meeting decided to add a provision to review the production cuts based on market fundamentals at the 2018 OPEC meeting.

Dan Eberhart, CEO of Canary, the largest private wellhead service company in North America which provides services in drilling and producing, said that OPEC members "need to be strategic and systemic in unwinding this agreement."

"If (OPEC) just exits the agreement, the 1.8 million barrels of oil would immediately flood the market," he said.

Russia agreed to the extension, but had voiced concerns over oil price hikes. "Russia is looking for a way to take a pause and keep prices at a level that is stable for it," Taylor said.

OPEC decided in May to prolong the accord, which was reached last December, by nine months. The agreement was also supported by 11 non-members. Enditem