The Organisation of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, will ease oil supply cuts next month as global economies slowly recover from the effects of the coronavirus pandemic, Saudi energy minister announced yesterday.
“As we move to the next phase of the agreement the extra supply resulting from the scheduled easing of production cut will be consumed as demand continues on its recovery path,” Abdulaziz Bin Salman said during a meeting of energy ministers of oil producing countries, dubbed the Joint Ministerial Monitoring Committee (JMMC).
Abdulaziz pointed out that the kingdom’s oil exports in August would “remain the same as in July because some 0.5 million bpd of extra barrels Riyadh was set to pump will be used domestically.”
Since May, OPEC+ countries, led by Russia and Saudi Arabia, have been cutting output by 9.7 million barrels per day (bpd), after the virus undermined a third of the global demand for crude.
After July, oil cuts were slated to decline to 7.7 million bpd until December.
Five OPEC+ sources told Reuters that there were “no recommendations to prolong record cuts into August.” While OPEC’s Secretary-General Mohammad Barkindo said earlier that the oil market was “getting closer to balance this week”.
Oil prices have recovered to almost $43 a barrel from a 21-year low below $16 in April. The recovery in prices have allowed some US producers to resume suspended production.