OPEC and other nations poised to extend output cuts

In November past year, OPEC and 11 other non-OPEC producers, including Russian Federation, agreed to cut output by about 1.8 million barrels per day between January 1 and June 30.

Saudi Arabia's powerful oil minister, Khalid al-Falih, is chair of the group as the cartel's largest member looks to shore up the oil price by reducing the size of oil inventories.

"Nine months was priced in", Sen said.

"The problem was that OPEC had come up with a statement saying they'd do 'anything it takes, ' so people were expecting just a little bit more from the meeting", said Nitesh Shah, commodities strategist at ETF Securities, who believes crude is unlikely to go much above $55 this year.

The price for Brent crude oil was about $53 per barrel at 6 a.m. EDT and moving lower from the previous close.

"We considered various scenarios, from six to nine to 12 months, and we even considered options for a higher cut".

"All indications are solid that a nine-month extension is the optimum, and should bring us to within the five-year average of inventories by the end of the year".

North Dakota ranchers could see bump from Chinese exports
Under the deal, China will also lift its ban on US beef imports and accept USA shipments of liquefied natural gas . China has traditionally rejected beef reared using hormones and growth promoters, a stance it shares with the EU.

"Opec hasn't achieved its stated aim of a global glut of oil inventories back to normal levels - thanks mainly to a resurgent United States shale oil industry which has taken up much of the slack in the reduced Opec output".

Oil prices that topped $100 a barrel in 2014 may have helped shale oil production feasible.

More than 400 oil rigs are now working USA shale fields - an increase of more than 120 percent compared with a year ago.

Energy ministers from OPEC and other major producers will decide whether to extend production cuts at a meeting in Vienna on Thursday.

Commerzbank cited data from the U.S. Department of Energy saying U.S. production was roughly 540,000 barrels per day higher in mid-May than at the start of the year.

Their output is already partially offsetting the cuts. The cuts would be maintained at the current agreed level with a 1.2mn bpd OPEC reduction and 0.6mn contribution from non-OPEC members.

Some non-OPEC countries, such as Russia, Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Sudan, and South Sudan promised to cut output by 600,000 barrels per day. "The market is big enough to absorb the expected increased production in shale in 2017", he said.

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