Oil was mixed on Thursday after OPEC members agreed to extend curbs on output, though a final deal hinged on a decision by non-OPEC producers later in the day.
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Iran’s energy minister announced that Nigeria and Libya would be included in the oil output deal and an OPEC communique stated that the countries would not produce above 2017 levels in the new year.
The Oman minister said that Nigeria had agreed to cap output at 1.8 million barrels per day.
Under the deal, due to expire in March 2018, the Organization of the Petroleum Exporting Countries and other producers such as Russia would cut 1.8 million barrels per day from the market in an attempt to tackle global oversupply and bolster prices.
OPEC on Thursday agreed to extend cuts for a further nine months.
“OPEC extending the output cut till the end of 2018 was widely anticipated; however, suggestions that both Nigeria and Libya have decided to cap production is a bullish signal,” said Abhishek Kumar, senior energy analyst at Interfax Energy’s Global Gas Analytics in London.
However, price reactions were mostly muted, with many analysts saying the nine-month extension was already priced in.
“Because they’re going to be meeting again in a few months, we’re just going to be doing this again,” said John Macaluso, an analyst at Tyche Capital Advisors in New York.
The most active February Brent contract was trading up 16 cents, or 0.3 percent, at $62.37 a barrel at 1:29 p.m. (1829 GMT). The front-month January contract expires later on Thursday.
U.S. light crude for February delivery was at $57.15 a barrel, down 21 cents, or 0.2 percent.
The Brent/WTI spread WTCLc1-LCOc1 widened by 49 cents.
Though the deal looked set to go through, a final decision involving non-OPEC producers, including Russia, had yet to be announced.
A news conference toward the end of the day was expected to outline whether the deal will include a review in June 2018, an opportunity to reassess the cuts, and possibly end them.
“It’s not surprising that they gave themselves an out,” said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management, referring to the June meeting.
He said the important question would be who complies. “I think that’s where market attention will focus, because you’re trying to get a market into balance,” Haworth said.
Market watchers said they would look closely at output from countries like Iran, Libya and Russia.
“It will be hard to keep the Russian oil companies in the fold, if shale producers continue to make increased sales to Asia as well,” said John Kilduff, partner at Again Capital Llc in New York.
Russia has been pushing for a clear message on how to exit the cuts, concerned that prices do not rally too quickly and that rival U.S. shale firms do not boost output further.
One of OPEC’s biggest problems while cutting supplies has been rising U.S. output, which is gaining global market share and undermining the group’s efforts to tighten the market.
U.S. oil production hit a new record of 9.68 million barrels per day (bpd) last week, according to government data released on Wednesday.
That is up from 8.5 million bpd at the end of last year, before the cuts were implemented.
“We’re sticking with our range bound thesis,” said U.S. Bank’s Haworth, “With these higher prices it’s reasonable for U.S. producers to add to production because the cost of new wells hasn’t gone up that much.”