Amid significant speculation, OPEC agreed on Thursday to extend production cuts of 1.800 million barrels per day for an additional 9-months past the original agreement. Though the move had been expected, most oil investors were hoping that producers would agree on deeper or longer cuts to ease the global supply glut.
More than 20 OPEC and non-OPEC member states had decided late last year to collective slash production to help offset the ongoing supply imbalance. However, the deal did not immediately affect global inventories, especially amid sluggish demand growth.
Nevertheless, the impact has become more visible over the past two months, with US crude stockpiles falling for the seventh week in a row.
In the meantime, US crude futures have broken below the strong support at $50.00, and were last seen around $49.20 per barrel.