AFP, Vienna :
OPEC members, led by Saudi Arabia, and other key oil producers agreed Saturday to extend historic output cuts through July, as oil prices tentatively recover and coronavirus lockdowns ease.
The 13-member cartel and its allies, notably Russia, decided to extend by a month deep May and June cuts agreed in April to boost prices, the Organization of the Petroleum Exporting Countries said in a statement.
Prices had plummeted owing to falling demand as countries around the world imposed strict lockdowns to stop the spread of the new coronavirus.
“All participating countries… agreed the option of extending the first phase of the production adjustments pertaining in May and June by one further month,” the OPEC statement said.
Under the terms of the April agreement, OPEC and the so-called OPEC+ pledged to cut output by 9.7 million barrels per day (bpd) from May 1 until the end of June.
The cuts were then to be gradually eased from July, to 7.7 million bpd until December.
Algerian Oil Minister Mohamed Arkab, who currently holds OPEC’s rotating presidency, told AFP that the agreed cut for July was 9.6 mbpd, just slightly below the 9.7 mbpd for May and June. Oil ministers from key producers will meet monthly to assess the agreement, he added.
US Energy Secretary Dan Brouillette welcomed the extension of cuts. “I applaud OPEC-plus for reaching an important agreement today which comes at a pivotal time as oil demand continues to recover and economies reopen around the world,” he said in a tweet.
Analysts had expected the May-June cuts to be extended by at least another month, if not longer.
Although more countries around the world are gradually moving out of lockdown, crude consumption has not returned to pre-confinement levels, which were already comparatively low.
“Today’s deal is a positive development and, unless a second COVID-19 wave hits the world, it will be the backbone of a quick recovery for the energy industry,” Bjornar Tonhaugen of Rystad Energy said, referring to a feared fresh wave of new coronavirus infections.
OPEC members, led by Saudi Arabia, and other key oil producers agreed Saturday to extend historic output cuts through July, as oil prices tentatively recover and coronavirus lockdowns ease.
The 13-member cartel and its allies, notably Russia, decided to extend by a month deep May and June cuts agreed in April to boost prices, the Organization of the Petroleum Exporting Countries said in a statement.
Prices had plummeted owing to falling demand as countries around the world imposed strict lockdowns to stop the spread of the new coronavirus.
“All participating countries… agreed the option of extending the first phase of the production adjustments pertaining in May and June by one further month,” the OPEC statement said.
Under the terms of the April agreement, OPEC and the so-called OPEC+ pledged to cut output by 9.7 million barrels per day (bpd) from May 1 until the end of June.
The cuts were then to be gradually eased from July, to 7.7 million bpd until December.
Algerian Oil Minister Mohamed Arkab, who currently holds OPEC’s rotating presidency, told AFP that the agreed cut for July was 9.6 mbpd, just slightly below the 9.7 mbpd for May and June. Oil ministers from key producers will meet monthly to assess the agreement, he added.
US Energy Secretary Dan Brouillette welcomed the extension of cuts. “I applaud OPEC-plus for reaching an important agreement today which comes at a pivotal time as oil demand continues to recover and economies reopen around the world,” he said in a tweet.
Analysts had expected the May-June cuts to be extended by at least another month, if not longer.
Although more countries around the world are gradually moving out of lockdown, crude consumption has not returned to pre-confinement levels, which were already comparatively low.
“Today’s deal is a positive development and, unless a second COVID-19 wave hits the world, it will be the backbone of a quick recovery for the energy industry,” Bjornar Tonhaugen of Rystad Energy said, referring to a feared fresh wave of new coronavirus infections.
