OPEC makes deal to extend cuts on oil production until March 2020

The oil harbor in Novorossiysk the southern Russian seaport town in the Black Sea territory

The Organization of the Petroleum Exporting Countries (OPEC) agreed in Vienna on Monday to extend the output cut till the end of March 2020.

Prolonging the output pact is likely to anger U.S. President Donald Trump, who has demanded OPEC leader Saudi Arabia supply more oil and help reduce fuel prices if Riyadh wants U.S. military support in its standoff with arch-rival Iran.

The OPEC oil cartel has chose to maintain its production cuts of 1.2 million barrels a day for another nine months.

Oil prices drifted lower on Tuesday, as weak global data raised concerns about future demand for the commodity despite a positive boost from OPEC's decision to extend supply cuts until next March.

OPEC, pressured by booming U.S. shale production, abundant global crude supplies and weak oil demand growth, cemented its ties with Moscow and other non-cartel partners with a formal charter, aiming to boost its market clout.

Nigeria, Venezuela, Iraq and Oman also expressed their conditional support for an extension of as long as nine months, which isn't the OPEC policy playbook as the oil-club has traditionally aimed for half-year deals. Saudi Energy Minister Khalid Al-Falih is "absolutely" sure that non-members including Russian Federation will ratify the accord, while his counterpart from the United Arab Emirates Suhail Al Mazrouei told reporters he is "very confident".

The price of Brent crude, the worldwide standard, rose 32 cents Monday to $64.06 a barrel. "Iran is not going to leave OPEC but I believe OPEC is going to die with these processes".

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Oil prices have come under renewed pressure in recent months from rising United States supplies and a slowing global economy.

Consistent rise in oil prices, analysts say, is good for the implementation Nigeria's N8.91 trillion budget 2019.

Fortified by Moscow and other cooperating non-members, OPEC+ once again controls most of the world's crude oil supply.

The OPEC cartel and its oil-producer nation allies opted in December to trim daily crude output by 1.2 million barrels.

At the time of writing, Brent crude was trading at US$64.87 a barrel and West Texas Intermediate was trading at US$58.91 a barrel, both down from opening. "We're pretty much in a stalemate situation with the continued rise of USA production".

Iranian Minister of Petroleum Bijan Namdar Zanganeh said on leaving the meeting that the charter would have "no impact on OPEC and its mechanism or decisiontaking".

The move to extend production cuts was reportedly supported by Iran, which is now at odds with Saudi Arabia over the recent attacks on two oil tankers in the Strait of Hormuz and the ongoing war in Yemen. A slew of disappointing manufacturing reports from the US, China and Europe also undermined faith in oil demand. The OPEC also held a meeting with non-OPEC allies on Tuesday.

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