TEMPO.CO, Jakarta - Global oil prices dropped 5 percent despite the extended oil production cut from oil producing countries which is scheduled to last for nine months.
In the meeting at OPEC headquarters in Vienna, energy ministers from OPEC and non-OPEC countries agreed to extend the oil production cut until March next year. Investors hope that oil producers would be a step ahead.
As it was reported by BBC News today, the prices of West Texas Intermediate crude oil is dropped US$2.58 at US$48.78 per barrel, while the Brent crude slid down US$2.60 to US$51.36 per barrel.
Energy Minister of Saudi Arabia, Khaled al-Falih, stated that the Saudi government is considering some scenarios to extend the oil production cut from six to nine to 12 months. “We even considered options for higher cuts,” he said during the Vienna meeting.
The OPEC countries and other eleven oil-producing countries, including Russia, agreed to reduce oil production in order to stabilize the prices that continue to fall even lower. These countries agreed to reduce the production up to 1.8 million barrels per day which equate to 2 percent of the world oil production.
Analysts criticized OPEC for failing to slash oil production which led to the falling prices of oil. Alexander Andlauer from Alphavalue considers OPEC’s strategy as an "old-fashioned" strategy.
SETIAWAN ADIWIJAYA
