Russia and Saudi Arabia have agreed to extend by one month the effective reduction of oil production in the framework of a prisoner in April, new deal OPEC+. This was announced by Reuters sources.
According to them, “Saudi Arabia and Russia have provisionally agreed to extend current record production cuts of oil for one month, simultaneously increasing the pressure on countries with poor enforcement of obligations to reduce their production,” says PRIME.
Meanwhile, OPEC in may, performed deal only 75% as Iraq and Nigeria had not fully complied with its commitment to reduce the oil production, the source said “Interfax”.
what’s More, OPEC and non-OPEC still can’t agree on the rescheduling of the meeting of OPEC Ministers and Ministers of non-OPEC for a week before — on June 9-10 to 4-5 June in order to in the case of a decision on the extension of the may restrictions for some period after June, to have an understanding of what level of harvest would be in July.
Recall that from the beginning of this year on the global oil market rode several waves of falling prices for “black gold”. The negative situation caused by a whole complex of factors: a General overproduction of raw materials, a sharp drop in demand due to the rapid spread of coronavirus infection COVID-19 (March 11, was declared a pandemic) and concerns about its impact on the global economy and the collapse of the deal, OPEC+ (officially from April 1, but in fact, after fruitless negotiations of the countries-oil producers at a meeting on March 6 in Vienna). Just last circumstance was the trigger to the collapse in oil prices. Moreover, Saudi Arabia announced plans to increase production and lower oil prices. Later, the desire to lower the prices declared Iraq, Kuwait, UAE and Nigeria.
For the first quarter of 2020, the price of Brent crude fell by 65.6%, while WTI rose by 66.5%. And in late March, value Junetion of the futures on Brent fell below $22 per barrel (to $of 21.72), that is, to at least March 2002, and the may futures for WTI to us $20.1.
on April 12 OPEC countries+ finally agreed on a new deal, joined by 23 States. The agreement will be valid for two years, from may 1, 2020 to may 1, 2022-th. In may—June this year, the production cuts will amount to 9.7 million barrels per day (from October 2018), then — until the end of 2020 — 8 million barrels, and 6 million by the end of April 2022. While Russia and Saudi Arabia base count will be 11 million barrels per day (of the Russian Federation in the first 2 months will reduce production at 2.5 million barrels per day). New business OPEC+ was a forced reaction of oil producing countries on the situation in the market and pressure from the United States. Overall, however, it does not cover the volume decline in world demand for the same in the market have accumulated huge reserves of raw materials. Nevertheless, assured the head of the Ministry of energy Alexander Novak, if necessary, the parties to the transaction can take additional measures to stabilize the situation on the market.
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