OPEC+ agreed to a one-month extension of its record output cuts and adopted more stringent methods to ensure members don’t break their production pledges.
In addition, as Bloomberg reported, the meeting’s draft communique states that any member that doesn’t implement 100% of its production cuts in May and June will make extra reductions from July to September to compensate for their failings.
Oil has just posted a sixth weekly gain in London, more than doubling to $42.30 a barrel since April as traders anticipate tighter supplies as demand recovers from the coronavirus lockdowns.
The cartel will meet again in the second half of June for another review of the oil market. Talks are scheduled on June 18 for the Joint Ministerial Monitoring Committee, which could recommend a further extension if it’s deemed necessary, pushing the deep production cuts into August, a delegate said. The panel will meet every month until December, according to the draft communique.
In a tweet on Saturday, OPEC announced that "Iraq has renewed its full commitment to the oil production adjustments decisions reached in April 2020 by OPEC Members Countries and non-OPEC oil-producing countries participating in the Declaration of Cooperation".
Even if the cuts begin to taper in August, Iraq would have to cut output by more than 1.3 million barrels a day from its April level.
The 179th Meeting of the OPEC Conference started on Saturday under the chairmanship of HE Mohamed Arkab, Algeria’s Minister of Energy and President of the OPEC Conference.
HJ/TSN2280674/PR
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