Oil prices settled sharply lower Thursday, as investors were disappointed about the Organization of the Petroleum Exporting Countries' (OPEC) decision to extend production cuts by nine months.

The OPEC and Non-OPEC states on Thursday decided to extend the joint oil output cut by nine months to rebalance the global oil market after the ministerial meetings in Vienna, Austria.

It is not surprising that OPEC and its allies made the decision as the extension plan had been recommended by some major oil producers before the meeting.

Oil prices took a hit after the decision, as traders had started to speculate that maybe the cartel would make deeper cuts to output or even keep the agreement in place for another year.

OPEC and some Non-OPEC oil producers jointly cut the 1.8 million barrel per day output from the beginning of 2017 to July 1, seeking to rebalance the oil market from a production glut.

The West Texas Intermediate for July delivery tumbled 2.46 U.S. dollars to settle at 48.90 dollars a barrel on the New York Mercantile Exchange, while Brent crude for July delivery dropped 2.50 dollars to close at 51.46 dollars a barrel on the London ICE Futures Exchange.