OPEC, Russia and their allies have agreed to extend unprecedented cuts in oil production until the end of July.
According to Reuters, the group, called OPEC +, requested countries including Nigeria and Iraq to exceed production quotas in May and June to compensate for this through an additional reduction from July Until September.
OPEC + agreed in April to cut supplies to 9.7 million barrels per day in May and June to support prices that collapsed due to the Corona virus crisis. The cuts were to be cut to 7.7 million barrels per day from July to December.
The Saudi Energy Minister, Prince Abdulaziz bin Salman, told a conference of OPEC ministers, "The request comes back as large consumption economies rise from the isolation measures imposed due to the epidemic, but we have not overcome the difficulties yet." And we still have challenges ahead.
Brent benchmark crude rose to a three-month high on Friday, surpassing $ 42 a barrel, after falling below $ 20 a barrel in April. But prices are still a third down from them at the end of 2019.
We expect prices to be strong starting on Monday and maintain levels above $ 40. =======
It is not yet clear whether, after June, Saudi Arabia, the United Arab Emirates and Kuwait will extend their additional voluntary cuts of 1.18 million bpd not included in the agreement.
excess stocks
The April agreement was signed after pressure from US President Donald Trump, who seeks to avoid the failure of US oil production companies.
Prior to Saturday's talks, Trump, who had previously threatened to withdraw US forces from Saudi Arabia if Riyadh did not move, spoke to the Russian and Saudi leadership, saying he was happy with the recovery of prices.
While prices have only partially recovered, they are still lower than most American shale oil producers' costs. Closures, layoffs and cost cuts continue throughout the United States.
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