OPEC+ (OPEC and Russia) are set to extend their record oil production cuts for a further month as oil recovers to near $40 a barrel, with the group attempting to prop up a market devastated by the coronavirus pandemic.
In recent days, delegates from Opec and Russia had discussed extending the 9.7m barrels a day of cuts for one-to-three to support the oil market, but Moscow was keen to begin easing the curbs sooner.
The deal was hammered out on Saturday before the formal video meeting of oil ministers, according to one OPEC delegate and people briefed on the plan, with the cuts to be extended then reviewed monthly until December.
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The meeting of OPEC members wrapped up within a couple of hours on Saturday, with the deal now to be signed off by non-members such as Russia later the same day.
The so-called Opec+ group agreed in April to cut almost 10 per cent of global supply in May and June to bolster the crude market, and were initially expected to taper cuts from July to 7.7m b/d or roughly 8 per cent for the rest of the year as demand recovers.
But the nascent recovery in oil prices, which have risen from below $20 a barrel in April to near $40 a barrel today, has encouraged the group to keep the supply restrictions in place.
The move is intended to help tighten up a market that faced a huge drop in consumption as government lockdowns and travel bans spread across much of the world in March and April, respectively.
Financial Times
