OPEC Proposes To Extend Deep Output Cuts Through July

OPEC members led by Saudi Arabia decided Saturday to extend deep output cuts through July, but a final deal depends on the agreement of other producers, as oil prices tentatively recover as coronavirus lockdowns ease

Vienna, (UrduPoint / Pakistan Point News - 6th Jun, 2020 ) :OPEC members led by Saudi Arabia decided Saturday to extend deep output cuts through July, but a final deal depends on the agreement of other producers, as oil prices tentatively recover as coronavirus lockdowns ease.

The 13-member cartel decided to extend by a month historic May and June cuts agreed in April to boost prices, Algerian Oil Minister Mohamed Arkab, who currently holds OPEC's rotating presidency, told AFP.

Other oil producing nations, such as Russia and Mexico, joined the Organization of Petroleum Exporting Countries in a second meeting and have yet to agree to the decision.

Prices have plummeted over falling demand as countries around the world have imposed strict lockdowns to stop the spread of the new coronavirus.

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.

The April deal was signed after days of wrangling between major players, whose revenues have been ravaged by the collapsing oil market this year.

Analysts have expected the May-June cuts to be extended by at least another month, if not until the end of the summer or even until the end of the year.

Although more countries around the world are gradually moving out of lockdown, crude consumption has not returned to pre-confinement levels, which had already been comparatively low.