OPEC+ MEETS TO DEBATE OIL PRODUCTION QUOTAS, NEW CUT Cuts were being discussed among options for Sunday’s session
OPEC and its allies have been meeting to discuss a new deal possibly adjusting countries’ output quotas and a further cut in production, sources told Reuters, as the group faces flagging oil prices and a looming supply glut.
OPEC+, which groups the Organization of the Petroleum Exporting Countries and allies led by Russia, pumps around 40% of the world’s crude, meaning its policy decisions can have a major impact on oil prices.
Four sources familiar with OPEC+ discussions have told that additional production cuts were being discussed among options for Sunday’s session.
Three out of four sources said cuts could amount to 1 million bpd on top of existing cuts of 2 million bpd and voluntary cuts of 1.6 million bpd, announced in a surprise move in April and which took effect in May.
The April announcement helped to drive oil prices about $9 per barrel higher to above $87, but they swiftly retreated under pressure from concerns about global economic growth and demand. On Friday (June 2) international benchmark Brent crude settled at $76.
If approved, the new cut would take the total volume of reductions to 4.66 million bpd, or around 4.5% of global demand.
Typically, production cuts take effect the month after they are agreed but ministers could also agree a later implementation. They could also decide to hold output steady.
OPEC has denied media access to its headquarters to reporters from Reuters and other news media.