OPEC and allies agree to extend record oil production cut
Published : Saturday, 6 June, 2020 at 11:29 PM Count : 161
OPEC and oil-producing partners agreed to cut a record 9.7 million barrels per a day production cut for an additional month in an ongoing effort to balance the global oil market. The deal was finalized during a group video conference.
“Today we have grounds to be cautiously optimistic about the future, but we are not out of the woods yet and challenges ahead remain to be seen,” Saudi Arabia’s Energy Minister Prince Abdulaziz said in opening remarks as the OPEC+ meeting began. He urged the group to display unity and come to a swift decision.
“Together we are stronger, together we can restore stability to oil markets and help rebuild the global economy,” he said.
Prior to the meeting, the oil market expressed optimism about an agreement. West Texas Intermediate jumped 5.722% to $39.55 on Friday, while international benchmark Brent crude rose 5.7878% to ৪ 42.30. This was the sixth week of profit on each contract and the highest settlement since March.
An ongoing issue for OPEC + is that countries, including oil-dependent Iraq, are not complying with their allotted quotas. A spokesman for Iraq's oil ministry said in a statement that "the country is committed to the agreement, despite the economic and financial situation that Iraq is facing."
The country will impose more production barriers between July and September in an effort to avoid non-compliance in May.
According to the previous agreement, which was scheduled for an extraordinary multi-day meeting in April, the 23-member team began reducing production by 9.7 million bpd in May, which will be increased by the end of June. Pressing will start after cutting. 7.7 million bpd will be taken offline between July and the end of 2020, then 5.6 million BPD will be taken from January 2021 to April 2022.
After Saturday's meeting, the 9.7 million bpd cut will be extended to the end of July and will then be reviewed on a monthly basis. The next meeting will be held on June 18.-Internet