OPEC and Russia extend cuts

RUSSIA / FSU POLITICS - In Brief 08 Jun 2020 by Alex Teddy
On June 6 OPEC and Russia agreed to a 30 day prolongation of their record breaking production reduction. The objective is to keep oil prices from falling and ideally raise them. There are 13 OPEC states, and Saudi Arabia is the mightiest producer among them. Russia is not in OPEC but co-operates with it as part of OPEC+. In July the cuts of 9.6 million barrels per day shall continue. Benchmark oil prices are now USD 40 pb. In April prices had plunged such that oil futures were subzero. Saudi Arabia and Russia are satisfied that they have persuaded other countries to extend the cuts. April was the worst month in history for the oil market - so the Russian oil minister said. The US Energy Secretary applauded the production cuts extension. It is suspected that Nigeria and Iraq will cheat on their quotas. They desperately need money to plug massive black holes in their budgets caused by the oil price collapse in April. Saudi Arabia has said the voluntary additional cuts that it implemented will be ended in June 2020.

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