Oil prices fell on Thursday as OPEC ministers met to decide how long to extend oil production cuts in an attempt to drain a global glut that has depressed markets for almost three years.
One OPEC delegate at the meeting in Vienna said the group of 14 oil producers had agreed to extend cuts in production by nine months to March 2018.
Brent crude oil dropped as much as $1.24 a barrel to a low of $52.72 before regaining some ground to trade 80 cents lower at $53.16 by 1100 GMT. US light crude was 90 cents lower at $50.46.
Both benchmarks were still up about 15 percent from May lows.
The Organization of the Petroleum Exporting Countries and other producers, including Russia, had been widely expected to agree to extend a cut in oil supplies of 1.8 million barrels per day (bpd) until the end of the first quarter of 2018.
OPEC’s current deal, agreed at the end of last year, only covers the first half of 2017.
Saudi Arabia’s energy minister, Khalid al-Falih, said OPEC was highly likely to roll over its existing agreement on the same terms for nine months.
But that disappointed some investors who had hoped that OPEC might reduce output even further to drain stocks more quickly.
“It is a disappointment that OPEC hasn’t done more to balance the markets,” said Olivier Jakob, energy markets analyst at Swiss consultancy Petromatrix.
“A nine-month extension of the output cuts is already baked into prices. This shows there's not much more OPEC can do.”
Amrita Sen, analyst at consultancy Energy Aspects agreed.
“Nine months was priced,” she said. “We thought the market would sell off if it was just (an extension of) nine months.”
Energy consultancy Wood Mackenzie said keeping existing oil output at current levels for another nine months would result in a 950,000 bpd production increase in the United States, thus undermining OPEC's efforts to balance supply and demand.
US oil production
OPEC ministers were still meeting behind closed doors by 1100 GMT on Thursday.
Oil falls as OPEC prepares to extend output cuts