Home / Oil & Energy / Oil & Companies News / Deeper OPEC+ supply cuts sends supportive signal to markets

Deeper OPEC+ supply cuts sends supportive signal to markets

After a marathon meeting, running late into the night of 5 December, the OPEC+ group has agreed to continue its current production restraint of 1.2 million barrels per day (b/d), and will add a further 0.5 million b/d of supply cuts through March.

Ann-Louise Hittle, vice president Macro Oils, said: “The group is taking a highly proactive approach to managing the market and will not commit to restraint beyond March 2020, when both a joint ministerial meeting and an extraordinary meeting will be held in the first week of the month.

“Russia has gained approval for its request to remove condensate from its quota. It will make an additional cut of 70,000 b/d beyond its current agreed cut of 300,000 b/d.

“Russia’s energy minister Alexander Novak confirmed the country’s commitment to cooperate with OPEC to balance the market.

“The new Saudi Energy Minister, Prince Abdul Aziz, was adamant that all those in the agreement must adhere and not leave the burden on Saudi Arabia.”

She added: “The fact the agreement runs to March could reduce its supportive impact on the market. However, the proactive, short-term management of the market OPEC+ is signalling is supportive overall to the outlook for 2020 and should avoid a significant downturn in prices.”
Source: Wood Mackenzie

Recent Videos

Hellenic Shipping News Worldwide Online Daily Newspaper on Hellenic and International Shipping