West Texas Intermediate (WTI) crude futures extended losses on Thursday morning as OPEC reportedly announced it would extend cuts in oil output by nine months to March 2018.
This as the group seeks to curb a global supply overhang which has depressed price and revenues over the past three years.
Prices had been close to $52.0 a barrel at the start of the session but sank shortly ahead of the meeting, and extended losses to around $50.43 a barrel immediately after Reuters broke the news of the agreement.
Ahead of the closed-door meeting on Thursday, Khalid Al-Falih, Saudi Arabia`s energy and industry oil minister told CNBC, "Nine months with the same level of production that our member countries have been producing at is a very safe and almost certain option to do the trick."
Saudi Arabia`s delegate explained while all options had been considered ahead of the announcement - including deeper cuts and a possible six-month extension - he suggested reaching an agreement to curtail oil production by a further nine months appeared the "safe bet".
Having come to expect a nine-month extension, the market may now see that outcome as little more than "a good start," said Amrita Sen, chief oil analyst at Energy Aspects.
"I think the market now, given that they announced the nine months already a few weeks ago, is expecting something a little bit more, maybe deeper cuts, maybe at least keeping the door open possibly for more cuts if inventories don`t fall," she told CNBC on the sidelines of the OPEC meeting on Wednesday.
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