Oil Supply Cut Agreement

“I welcome OPEC-plus for achieving an important agreement that comes at a crucial time today, as oil demand continues to recover and the world economy is reopened,” U.S. Energy Secretary Dan Brouillette wrote on Twitter after the extension. Oil prices ended higher after a volatile session on Wednesday, cancelled by an agreement between Saudi Arabia and Russia to extend supply cuts until July. The first details of the agreement, which Opec outlined on Thursday, would have resulted in the group and its allies reducing by 10 million barrels per day, or 10% of global supply, from May 1. An additional five million barrels are expected to be cut by other countries outside the group, such as the United States, Canada, Brazil and Norway. LONDON (Reuters) – OPEC oil production rose by more than a million barrels per day (bpd) in July, as Saudi Arabia and other Gulf members ended their voluntary supply restrictions in addition to an OPEC-led agreement and made limited progress in compliance with other members. As global closures weaken, oil demand is expected to outstrip supply in July, but OPEC has not yet accumulated 1 billion barrels of oil surpluses since March. OPEC supply cuts and cuts by North American producers in response to extremely low prices have restored traders` confidence in the oil market. According to the initial agreement reached on 12 April by the joint producer group OPEC Plus, production was expected to increase gradually after June. Iranian and Libyan offers remained stable in July and Venezuelan production continued to decline. All three are exempt from voluntary reductions due to U.S. sanctions or internal problems that limit production.

The Reuters survey aims to track supply in the market and is based on shipping data from external sources, Refinitiv Eikon data flow, information provided by tanker trackers such as Petro-Logistics and Kpler, and information provided by sources from oil companies, OPEC and consultants. A loosening of closures and weaker supply helped push LCOc1 oil above $40 to below $16 per barrel over 21 years in April, although concerns about a second wave kept earnings in the air. “Despite the economic and financial circumstances facing Iraq, the country maintains the agreement,” OPEC spokesman Assem Jihad, a spokesman for Iraq`s oil ministry, said on Saturday. One of the risks is that the recovery of the global economy from the worst pandemic passport will prove more difficult than investors hope. While reduced production and the voluntary closure of oil wells have helped bring demand and supply closer to balance, there are still huge oil reserves in fuel tanks and on vessels that could flood the market. Iraq, which had one of the worst compliance rates in May, agreed to further cuts, although it was unclear how Baghdad would reach an agreement with oil companies to curb Iraqi production. [OPEP/O] “Through the grace of Allah, and then with wise leadership, continuous efforts and ongoing conversations since dawn on Friday, we now announce the conclusion of the historic agreement to reduce OPEC members` production by about 10 million barrels of oil per day from May 1, 2020,” Dr. al-Fadhel wrote in a tweet.