Due to the possible extension of the current level of production until September 1, oil quotations increase, according to Interfax.
According to sources in The Wall Street Journal, the OPEC+ ministerial meeting will be rescheduled for June 4 from June 9.
August Brent futures by 8:00 in Kyiv rose in price on the London ICE Futures exchange by $0.32 (0.84%), to $38.64 per barrel.
July futures for WTI by this time rose by $0.18 (0.51%) to $35.62 per barrel at the New York Mercantile Exchange (NYMEX).
In April, OPEC+ countries decided to cut oil production by two years amid a sharp drop in global demand in the context of the coronavirus pandemic. Under the terms of the agreement, compared to the level of October 2018, OPEC+ production will be reduced by 9.7 million bpd (23%) in May-June, and in the future the rate of reduction will slow down. So, from June to the end of 2020, the decrease should be 7.7 million bpd (18%), then, until May 2022 – 5.7 million bpd (14%).
According to WSJ, Saudi Arabia insists that the current rate of decline in production – by 9.7 million bpd – to be maintained until the end of this year, while Russia would like to weaken the pace of decline since July 1.
The parties are discussing a compromise option, which may consist in maintaining the current rate of decline in production until September 1, sources say.
“As long as OPEC+ demonstrates its commitment to jointly reduce oil production, prices will stay in higher ranges,” AxiCorp experts say.
Recall that in May, OPEC was not able to fulfill the plan to reduce oil production.
Earlier it was reported that Russia agreed to reschedule the date of the OPEC+ meeting.
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