This is a developing story, check back for further reports and updates, including analysis from Stratas Advisors' Jeff Quigley in Vienna, throughout the day.
OPEC decided it would extend cuts in oil output by nine months to March 2018 on May 25, an OPEC delegate said according to a Reuters report.
OPEC has yet to make an official announcement.
The proposed cuts are expected to be shared again by non-OPEC producers during a meeting later in the day. Led by Russia, non-OPEC producers had initially curbed output in conjunction with OPEC in a landmark deal for the first half of the year from January.
Oil prices extended earlier losses shortly after reports began to emerge from Vienna as traders reacted to the developments.
Early on May 25, Brent was trading 1.4% lower at $53.21 a barrel with the West Texas Intermediate (WTI) benchmark edging down by nearly the same amount to $50.57 per barrel.
“I think the negative reaction is because there isn’t a lot of detail yet, said Jeff Quigley, director of energy markets for Stratas Advisors, who spoke with Hart Energy from Vienna. “The nine-months had already been baked in and a lot of people where already trading on that assumption. Unless you see a significant extension there isn’t going to be much price pop.”
News of the nine-month extension starting emerging when Khalid Al-Falih, Saudi Arabia's energy and industry oil minister told CNBC, "Nine months with the same level of production that our member countries have been producing at is a very safe and almost certain option to do the trick."
Saudi Arabia's delegate explained while all options had been considered ahead of the announcement—including deeper cuts and a possible six-month extension—he suggested reaching an agreement to curtail oil production by a further nine months appeared the "safe bet".
Miswin Mahesh, an oil analyst at Energy Aspects, told CNBC via telephone that "oil prices are always choppy at this point" when OPEC meetings are happening.
He added that the price fall on May 25 "was probably triggered" by "imbalances" in the market with some expecting deeper cuts to OPEC production.
Quigley said any official announcement would most likely come later in the day assuming non-OPEC countries decide to follow suit at their meeting also being held today.
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