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. Last Updated: 07/27/2016

Oil Cuts Extended, Price Remains Low

ABU DHABI, United Arab Emirates -- The leaders of six Gulf Arab states decided Wednesday to extend until the end of 1999 cuts in oil production that were to end in June, but pulled back from earlier proposals for further cuts.

In a statement released at the end of a three-day summit, the Gulf Cooperation Council states "agreed to extend their pledged cuts until the end of 1999. At the same time, they urged other producers to take similar steps to achieve market stability for the benefit of producers and consumers.''

Members of the Organization of Petroleum Exporting Countries and producers outside the cartel agreed last June to withdraw 3.1 million barrels a day from the market for one year. OPEC's share of that was 2.6 million barrels per day.

The GCC groups Saudi Arabia, Kuwait, Oman, Qatar, Bahrain and the United Arab Emirates. They together control half the world's proven reserves of oil. All but Oman and Bahrain are OPEC members.

The summit has been overshadowed by record-low oil prices that have hit the economies of the Gulf Arab countries hard. The GCC states depend on oil exports for 75 percent of their revenue.

While the national leaders and oil ministers decided to extend the existing production cuts to December 1999, they decided not to reduce output further.

They were not convinced that deeper cuts would shore up the market, one official said, speaking on condition of anonymity.

Jamil al-Hojeilan, the secretary-general of the GCC, said Tuesday that overproduction by oil-rich nations was to blame for the price slump.

Analysts say Venezuela, Iran, Indonesia and Qatar are the main overproducers.

"The strategic view of oil policy in the GCC countries is to keep a balance between supply and demand. We hope that pledges of abiding by quotas agreed upon are respected,'' al-Hojeilan said.

He denied that GCC oil ministers had agreed to reduce production.

Officials at the summit had earlier made such a claim, adding that the GCC ministers also agreed to ask other producers inside and outside OPEC to join them in the cuts, starting in March.

Shortly before the GCC meeting began, January futures contracts for Brent crude - a widely watched benchmark - fell to a record low of $9.92 a barrel on the International Petroleum Exchange in London.

Gulf oil generally sells at a dollar or two less than the North Sea's Brent, which was trading at just $10.20 a barrel by early afternoon, up only 9 cents on the day.