OPEC+ mulls extension to oil cuts

OPEC+ members are considering extending the current oil output cut to stabilise global oil prices, Bloomberg reported yesterday.

Members of the Organisation of the Petroleum Exporting Countries (OPEC) and Russia were discussing a proposal to roll over supply curbs for “one to two months”.

In April, OPEC+ agreed to cut oil output by a record 9.7 million barrels per day (bpd), or about ten per cent of global output, until the end of June, in an effort to lift prices battered by a demand drop linked to global lockdowns imposed to stop the spread of the novel coronavirus. The agreement also stipulated that the reduction would be followed by a further cut of about 7.7 million bpd starting July until the end of the year, followed by a third six million bpd cut applied from January 2021 through to April 2022.

Reuters quoted sources as saying that Saudi Arabia was recently “leading discussions on sustaining current output cuts until the end of the year.”

READ: Saudi Arabia urges OPEC+ to further reduce oil production to restore market balance

The source pointed out that there was “support” for Russia’s proposal for an extension of one month, but “we still do not have consensus over it”.

OPEC+ group is scheduled to hold an online meeting on Thursday to discuss output policy.