• 3 minutes Australian power prices go insane
  • 7 minutes Wind droughts
  • 11 minutes  What Russia has reached over three months diplomatic and military pressure on West ?
  • 22 hours Is Europe heading for winter of discontent with extensive gas shortages?
  • 2 days GREEN NEW DEAL = BLIZZARD OF LIES
  • 4 hours Hopes Are Dashed For International Oil Companies In North Iraq
  • 7 hours 87,000 new IRS agents, higher taxes, and a massive green energy slush fund... "Here Are The Winners And Losers In The 'Inflation Reduction Act'"-ZeroHedge
  • 7 hours The United Nations' AGENDA 2030 - The vision for One World Governance ...an article by the famous Dr Robert Malone
  • 2 days "The Global Digital ID Prison" by James Corbett of CorbettReport.com
  • 4 days Changing Gazprom ADRs to Russian shares
  • 3 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
Saudi Arabia May Push For Higher OPEC Production

Saudi Arabia May Push For Higher OPEC Production

Saudi Arabia is reportedly planning…

Kazakhstan’s 300,000-Bpd Kashagan Oilfield Halts Output

Kazakhstan’s 300,000-Bpd Kashagan Oilfield Halts Output

The offshore oilfield Kashagan in…

Tom Kool

Tom Kool

Tom majored in International Business at Amsterdam’s Higher School of Economics, he is Oilprice.com's Head of Operations

More Info

Premium Content

OPEC+ Agrees On Extending Record Output Cuts

OPEC and its partners concluded their meeting on Saturday afternoon, announcing that it would extend its current production cut deal.

Algeria’s Energy Minister Mohamed Arkab, OPEC’s current President summed up the group’s sentiment by saying that "Despite the progress achieved to date, we cannot afford to rest on our laurels,''.

The last couple of days, the cartel’s de-facto leader Saudi Arabia negotiated with other OPEC members and some non-OPEC countries including Russia, Kazakhstan and Azerbaijan to extend the current 9.7 million bpd output cuts for at least another month.

Most countries partaking in the record production cuts were willing to continue the current deal, but poor compliance from countries like Iraq, Nigeria and Kazakhstan has caused discontent among other OPEC members, some of which have even made deeper cuts than agreed on in April.

During the virtual meeting on Saturday, the cartel agreed that the countries that were unable to reach full conformity in May and June will have to compensate for this in July, August and September.

Oil prices effectively doubled during the month of May as global demand started to recover and record output cuts and worldwide well shut-ins decreased the monster glut.

While the OPEC+ deal extension undoubtedly will have a bullish effect on markets, prices aren’t likely to rip much higher on Monday as the OPEC+ news has largely been priced in already.

For oil prices to make a full recovery, global demand will have to recover and crude inventories have to be drawn down, both of which will likely take up to two years. Pioneer’s Scott Sheffield said that the quick rebound of demand to around 94-95 mb/d following the “reopening” of so many economies will give way to stagnation, saying that demand won’t reach pre-pandemic levels until 2022 or even 2023.

For now, the next bullish catalyst for oil could come from Saudi Aramco, which could set the trend for higher oil prices in June as it is expected to release its OSPs (official selling prices) on Monday. Aramco’s OSPs are often a leading indicator for Iraqi, Iranian and Kuwaiti crude prices, and last month, Brent futures rallied after Riyadh hiked its prices for crude to Asia.

By Tom Kool of Oilprice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment
  • Maxander on June 06 2020 said:
    Opecs have agreed to keep production cut for one more month for oil price recovery. But Opecs should understand this thing well right now that the oil price recovery from last 1 month we are seeing is more due to demand recovery rather than just production cut.
    So once the demand is back to the level of pre coronavirus pandemic, there is more chance that oil price recovery may step back as it wont have any other big trigger.
    So again it would be necessary to keep ongoing production cut extended for another some months post full oil demand recovery to the level of pre coronavirus pandemic.
  • Judah Grande on June 06 2020 said:
    Find the old pre emissions vehicles and make the old high sulphur diesel and stuff get the trucks and train and other pre emissions diesel engine equipment and put people back to work.

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News