‘Money talks’ as Opec output curbs pay off for cartel

A new accord by the Organization of the Petroleum Exporting Countries (Opec) to extend its curb on output has not yet had its desired effect of driving up prices but the effect of earlier cuts may be paying off for the cartel, an Irish energy has said.

Opec and allies extended oil production cuts for nine more months after last year’s landmark agreement failed to eliminate the global oversupply or achieve a sustained price recovery. The producer group, together with Russia and other non-members, agreed to prolong their accord through March, two delegates at the meeting in Vienna said.

Six months after forming an unprecedented coalition of 24 nations and delivering output reductions that exceeded expectations, some of the world’s largest oil producers have faced the fact that they have fallen short of their goal. While stockpiles are shrinking, ministers acknowledged that the surplus built up during three years of overproduction will not clear until at least the end of 2017.