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Why Saudi Arabia Must Push OPEC To Extend Production Cuts

Mar 24, 2017 | 00:01 GMT

Saudi Arabia is hoping to extend OPEC's production cuts beyond June.
Khalid al-Falih, the Saudi energy minister, will be tasked with helping rally support for extending OPEC's oil production cuts beyond their expiration in June.

(FAYEZ NURELDINE/AFP/Getty Images)

When news broke on Nov. 30, 2016, that OPEC had finally agreed on a deal to cut oil production, its first since 2008, traders sent Brent crude prices leaping 9 percent to break the $50 per barrel threshold. But after the deal was implemented, and despite reduced output among OPEC and non-OPEC producers of 1.4 million to 1.5 million barrels per day, the price of Brent fell back below $50 per barrel on Wednesday. There are a number of factors driving continuing soft prices, but OPEC members' compliance with the deal does not appear to be a significant one. This weekend in Kuwait, an OPEC committee charged with monitoring production output will meet to discuss compliance. The same meeting will also bring a key question into focus: Will OPEC members be willing to extend the deal beyond its June expiration?...

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