NEW DELHI: OIL supplier cartel Organisation of Petroleum Exporting Countries (OPEC) hasn’t yet reached a consensus on whether it should extend production cuts placed earlier this year past their agreed upon deadline in January. However, comments by ministers of a few member countries post the meeting suggest that while no full consensus has been reached yet, the organisation is likely to extend them past their cut off date.
While the 16 members of the OPEC held a meeting virtually on Monday, Tuesday will see another meeting with the members of the larger OPEC+ conglomeration—which includes countries such as Russia. The OPEC+ alliance had in April agreed to an extension of an earlier production cut in order to keep the crude oil market afloat during the worst of the pandemic.
According to the current deal, the production cut of 7.7 million barrels per day (bpd) is meant to be eased to 5.8 million bpd in January 2021, but many experts note that this is likely to be extended because demand has still not recovered enough to keep crude oil prices from plunging again. Brent crude had hit a multi-decade low of $16 per barrel in mid-April, while West Texas Intermediate had even slipped in negative territory.
In fact, OPEC member Algeria’s state news agency reported that Algeria’s energy minister Abdelmadjid Attar had said that there was “consensus at the OPEC level ... on extending the current cuts until ... the end of March”.