OPEC, Allies Oil Producers Agree on Extra 500,000 bpd Cuts

Published December 7th, 2019 - 02:59 GMT
OPEC, Allies Oil Producers Agree on Extra 500,000 bpd Cuts
OPEC+, which includes more than 20 producers, pump over 40 percent of the world's oil. (Shutterstock)
Highlights
The figures include an extra 500,000 barrels per day in cuts to take the OPEC+ target 1.7 million bpd, or 1.7 percent of global demand.

Saudi Arabia and Russia spearheaded a deal on Friday that will see the OPEC+ group of oil producers commit to some of the sector's deepest output cuts in a decade aiming to avert oversupply and support prices.

The figures include an extra 500,000 barrels per day in cuts to take the OPEC+ target 1.7 million bpd, or 1.7 percent of global demand.

Saudi with OPEC peers and allies led by Russia backed a plan that could see cuts of as much as 2.1 million barrels per day (bpd), Saudi Energy Minister Prince Abdulaziz bin Salman said.

OPEC+, which includes more than 20 producers, pump over 40 percent of the world's oil.

Of the 500,000 bpd additional cuts, OPEC will shoulder 372,000 bpd and non-OPEC producers an extra 131,000 bpd, OPEC announced.

"It's the best outcome you could have expected. It puts a floor under prices at $60 Brent but (we're) still likely in a $60-65 Brent market until the global economy improves and then we could see $65 to $70 Brent in Q2," said Gary Ross, founder of Black Gold Investors.

OPEC+ will deepen cuts for the first three months of 2020, shorter than the six- or 12-month scenarios some OPEC members wanted.

Eleven of OPEC's 14 member states are participating while Iran, Libya, and Venezuela are exempt.


Copyright © Saudi Research and Publishing Co. All rights reserved.

You may also like