Oil prices dropped five percent last week after OPEC and non-OPEC producers agreed to cut oil supplies at a level less than investors were expecting.
As Reuters reports, oil prices dropped Thursday after the Organization of the Petroleum Exporting Countries and some non-OPEC producers agreed at a meeting in Vienna Thursday to extend supply cuts of 1.8 million barrels per day until the end of the first quarter of 2018, a move that was expected, but less of a cut than some oil market investors were anticipating.
Brent crude oil dropped 4.6 percent to $51.46 a barrel and U.S. West Texas intermediate crude futures ended 4.8 percent lower at $48.90 a barrel, breaking below $50 for the first time all week.
It was the biggest percentage decline for both benchmarks since March 8. The global crude glut has persisted, despite the agreement by OPEC to cut production earlier this year.
At the same time, $50 per barrel oil has prompted more U.S. shale output, since production costs are lower, causing global supplies to grow.