The upcoming OPEC+ meeting, which said to be moving forward to June 4 from June 9 – 10, is set to discuss whether to extend its current output cuts for 1 to 3 months.
The Organization of the Petroleum Exporting Countries (OPEC) and allies agreed in April to record cut oil production by an unprecedented 9.7 million barrels per day (bpd) in May and June after the coronavirus pandemic lessened global demand.
While Saudi Arabia, Kuwait and the United Arab Emirates made further voluntary cuts of about 1.2 million bpd for June, bringing the total OPEC+ curbs to almost 11 million bpd.
According to the world’s largest oil producer cartel representative, the group is considering to prolong the oil cut beyond June after the petroleum market is moving fast, the object is to take short-term measures and not disrupt the rebalancing of the market.
The existing agreement is about to ease from July, however, it depends on the next meeting. As well as Russia, that desires relaxing the deal from July.
Even the oil prices have risen after the output cuts coincided with a stronger-than-expected rebound in demand, but the fear over coronavirus pandemic that could have a second wave make predictions of a recovery perilous.
Production cuts are meant to be eased to about 7.7 million barrels a day in July.
Nigeria and the state oil company of Abu Dhabi, the UAE’s capital, have already announced plans to increase exports in July in line with the OPEC+ deal from April.
If the decision to move the meeting is confirmed, it would mean also shifting committee meetings that normally take place before a ministerial conference to later in the month. OPEC has an Economic Commission Board meeting scheduled for June 2 – 3, and a Joint Technical Committee to assess implementation of the current supply cuts on June 5, said Bloomberg.