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Our Bold Oil Price Prediction After the May OPEC Meeting

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That's because US shale oil producers have taken advantage of the uptick in prices since previous year to ramp up production.

OPEC and other oil-producing nations have extended their output cuts for an additional nine months in an effort to shore up prices.

Global oil prices extended declines overnight as investors reacted to OPEC's decision yesterday in Vienna to extend an agreement among members and some non-member countries, including Russian Federation, that removes 1.8 million barrels of oil from the market each day for a further 9 months.

Also attending the OPEC meeting, Iran's oil minister, Bijan Zanganeh, said his country is signing contracts with European and Asian oil companies, but not American companies who are limited by the United States administration.

The alliance between OPEC and non-OPEC producers is strong, but not strong enough to derail production momentum from North America, analysis finds.

Just one day after OPEC announced a nine-month extension to its November production cut deal, the top oil official told reporters on Friday that "exports to the US will drop measurably".

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The decision by the oil producers also pushed down Asian shares.

"I think OPEC is actually back in business [but] as a swing producer", he said.

"OPEC announced it would extend cuts in oil output by nine months to March 2018 on Thursday, after November's landmark deal failed to clear a global supply overhang", reported CNBC.

There had been hopes that the extension would be 12 months or that the cuts would be even deeper. The oil prices in the commodity market went all-time low till $50 per barrel and there are predictions about it going lower if the balance is not maintained. The attacks have hit oil production and damaged pipelines in Nigeria. WTI (Light Sweet Crude Oil) in NY dropped by 0.78% to $48.52 per barrel.

"Both Brent and WTI traded around one-month highs ahead of the OPEC meeting, but were tempered when Saudi Arabia's oil minister played down further reductions in any new OPEC output deal".

Yet rising supply is partly due to US shale oil producers primarily from Texas, which have been happy to pump with abandon as improving technology and steady prices boosted returns.

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