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OPEC, Russia seen easing oil production cuts from August: Report

OPEC+ have agreed to cut production by a record 9.7 million barrels per day

Topics
OPEC | Oil Prices | OPEC output

Reuters  |  LONDON 

India stands to lose 3,00,000 bpd of crude oil supply from Iran, and 4,00,000 bpd from Venezuela
Oil prices have recovered to above $41 a barrel from a 21-year low below $16 a barrel in April

By Rania El Gamal, Alex Lawler and Vladimir Soldatkin

LONDON (Reuters) - and Russia will likely ease record oil production cuts from August as global oil demand recovers and prices have bounced back from their lows, four OPEC+ sources told Reuters.

and its allies including Russia, know as OPEC+, have agreed to cut production by a record 9.7 million barrels per day, or 10 percent of global demand, from May to support as demand plunged because of the coronavirus pandemic.

Record cuts were meant to last until the end of June but then had been extended into July. The sources said no discussions have taken place so far about extending the record cuts into August, meaning they were most likely to be eased to 7.7 million bpd until December.

"A further extension is unlikely unless there is another downward move in demand," one source said.

Key OPEC+ ministers will meet in mid-July at a panel, known as the Joint Ministerial Monitoring Committee (JMMC), to recommend the next level of cuts.

have recovered to above $41 a barrel from a 21-year low below $16 a barrel in April, helped by OPEC+ cuts and a recovery in demand as governments ease coronavirus lockdowns.

Saudi Arabia, OPEC's de facto leader, and Russia have to perform a balancing act of pushing up to meet budget needs while not driving them too high to avoid a resurgence of U.S. shale production.

Russian Energy Minister Alexander Novak said this month Moscow was happy with the current oil price. U.S. output has plunged by a record 2 million bpd, but there are signs it is recovering quickly.

 

(Additional reporting by Ahmad Ghaddar and Dmitry Zhdannikov; writing by Dmitry Zhdannikov; editing by David Evans)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Tue, June 30 2020. 20:24 IST
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