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Opec Agreement Oil

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Iraq, which had one of the worst compliance rates in May, agreed to further cuts, although it was unclear how Baghdad would reach an agreement with oil companies to curb Iraqi production. [OPEP/O] The latest news about the effectiveness of coronavirus vaccines, which have pushed oil prices to their highest level since their fall in April, may have made it more difficult to reach an agreement. In response to these higher prices, some oil producers saw less need to maintain supply and wanted to increase pumps to try to improve nearly a year with gloomy oil yields. The Organization of Petroleum Exporting Countries, Russia and other countries tentatively agreed on Thursday on a temporary cut in production. “I welcome OPEC-plus for achieving an important agreement that comes at a crucial time today, as oil demand continues to recover and the world economy is reopened,” U.S. Energy Secretary Dan Brouillette wrote on Twitter after the extension. Under the agreement, members of the Organization of Petroleum Exporting Countries, along with Russia and other countries, will increase production by 500,000 barrels per day in January and possibly a similar amount in the following months. The increase, less than 1% of the global oil market, comes at a time when demand is still under pressure from the coronavirus pandemic. “Demand is back on the decline, with the major oil-consuming economies coming out of the pandemic ban. But we are not out of the house yet and the challenges remain,” Saudi Energy Minister Prince Abdulaziz bin Salman said during the video conference of OPEC ministers. The April agreement was reached under pressure from U.S. President Donald Trump to avoid the collapse of the U.S. oil industry.

. The group, known as OPEC, also called for countries such as Nigeria and Iraq, which exceeded production quotas in May and June, to be offset by further reductions from July to September. Russian Energy Minister Alexander Novak said the OPEC Group was reviewing market developments and adjusted its estimates accordingly, adding that the market was about to be redirected. OPEC and OPEC will hold their next meetings scheduled from November 30 to December 1. That`s why the “effective” overall reduction in OPEC`s oil production could be around 8.1 million bpd in August, he added. It was surprisingly difficult to reach an agreement. Thursday`s meeting was delayed by two days as officials struggled for consensus. OPEC and other oil-producing countries agreed to cut 10 million barrels per day in May and June, or about 23 percent of their production, he said on Friday.

Other possible cuts could come from a meeting of the Group of 20 nations on Friday. As global closures weaken, oil demand is expected to outstrip supply in July, but OPEC has not yet accumulated 1 billion barrels of oil surpluses since March. The Organization of the Petroleum Exporting Countries (OPEC) and its allies agreed on Wednesday to reduce their current crude production to 7.7 million barrels per day (bpd) from August, from the current bpd of 9.7 million bpd. Prince Abdulaziz highlighted the current evolution of modes of transport around the world and said that OPEC expects fuel, gasoline and diesel consumption to increase in the coming months. The meeting was convened by Saudi Arabia, OPEC`s de facto leader, after President Trump met with Crown Prince Mohammed bin Salman, the kingdom`s top policymaker. Benchmark Brent crude LCOc1 climbed to a three-month high on Friday above $42 a barrel, after plunging below $20 in April. Prices are still one-third lower at the end of 2019. Trump, who previously threatened to pull U.S. troops out of Saudi Arabia if Riyadh did not act, spoke to the Russian and Saudi leaders before Saturday`s talks, saying he was happy with the price recovery. MOHAMMAD Sanusi Barkindo, OPEC Secretary General PRINCE Abdul Aziz Bin Salma

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