Finance: Oil dives 3% as OPEC agrees to extend production cuts for another 9 months

The extension had been widely expected, after numerous major players said before Thursday's meeting that they backed further cuts.

LONDON — OPEC has agreed to continue production cuts for a further nine months, according to reports on Thursday.

Bloomberg reported on Thursday morning that the cartel of major oil producers agreed to continue the cuts in its ongoing effort to rebalance the oil market and address the global supply glut that has subdued prices, citing a delegate at OPEC's meeting in Vienna who asked "not to be identified before an official announcement is made."

Reuters later also reported the news, citing delegates. The extension means cuts will continue until March 2018.

OPEC agreed to keep its own cuts of around 1.2 million barrels per day in place for nine months, Kuwaiti Oil Minister Essam al-Marzouq said, Reuters reports.

The extension had been widely expected, after numerous major players said before Thursday's meeting that they backed further cuts.

Earlier in May, for example, both Saudi Arabia and Russia, who is not a member of OPEC but is seen as a critical part of any potential agreement, said they backed extending the production cuts until March 2018.

OPEC members will "discuss the extension with nonmember producers later on Thursday," Bloomberg says.

Oil is significantly lower Thursday on the news, with both major benchmarks lower by more than 3%. Those falls reflect disappointment from some market participants that the cartel has decided not to deepen the cuts or extend them by more than the expected nine months.

Here is how West Texas Intermediate crude, the US benchmark, looks at about 5.10 p.m. BST (12.10 p.m. ET):

The extension had been widely expected, after numerous major players said before Thursday's meeting that they backed further cuts. Read Full Story