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Oil sinks on reports OPEC agrees to extend output cuts for 9 months

Oil prices fell sharply in North American trading on Thursday, erasing overnight gains following reports that global crude producers agreed to extend production cuts for an additional nine months, while ruling out deeper cuts.

Oil's losses accelerated after OPEC agreed to extend its production cuts for nine months, according to media reports, citing a delegate at the highly anticipated meeting in Vienna.

The OPEC ministers will discuss the production accord with a group of non-OPEC members later in the day and are expected to hold a joint press conference at 17:00GMT.

The U.S. West Texas Intermediate crude July contract was at $50.50 a barrel by 11:50GMT, down 86 cents, or around 1.7%.

The U.S. benchmark gained more than 1% to hit its strongest since April 19 at $52.00 in overnight trade.

Elsewhere, Brent oil for July delivery on the ICE Futures Exchange in London shed 75 cents to $53.20 a barrel, pulling back from a session high of $54.67.

In November last year, OPEC and 11 other non-OPEC producers, including Russia, agreed to cut output by about 1.8 million barrels per day between January 1 and June 30.

So far, the production-cut agreement has had little impact on global inventory levels due to rising supply from producers not participating in the accord, such as Libya, and a relentless increase in U.S. shale oil output.

Patrick Shmidt analyst Vertical Markets