Oil prices moved sharply lower on Thursday as OPEC members decided to extend the cuts till March next year. Industry experts had feared that if the meeting does extend the cuts further than March or even deeper than the current values, it will not have an impact on the prices as much of it had already been taken in by the market.

West Texas Intermediate for July delivery CLN7, -1.19%  on the New York Mercantile Exchange slumped 78 cents, or 1.5%, to $50.58, setting it on track for its lowest settlement level since May 18 and its biggest one-day percentage drop since May 4. Brent crude LCON7, -0.96%, the global benchmark, was off 73 cents, or 1.4%, at $53.24 a barrel.

The oil market did not seem impressed with OPEC deal, as bulls were hoping for deeper and extended cuts. The cuts agreement is going to include all the previous members’ nations and Russia. The meeting directives had already been forwarded to the respective countries. OPEC agreements on cuts have helped push back the oil prices above $50 a barrel, as producing countries were worried about their declining revenues in the wake of lower prices owing to the glut. Despite the cuts which have been in effect since January, prices have not gone up and the difference has been filled up by the US Shale production which has increased profoundly in the last few years. US is not participating in the cuts as it continues to add rigs to increase the shale production. Furthermore, the oil producers worry over the increase of electronic cars which continues to rob oil rich nations off their revenues. These factors have in turn prompted the oil producing nations to shift their focus from oil production to diversifying their economies into other sectors.

In December last year, the OEPC members along with Russia for the first time in 15 years decided to cut down production in the wake of declining revenues due to a slump in oil prices.

The cuts exclude Libya and Nigeria, as domestic turmoil continues to cap oil production in these countries. The Saudis also informed the media that the oil supply from Saudi Arabia was also to decrease from June, helping the rebalancing of oil prices.