The Organization of the Petroleum Exporting Countries (OPEC) announced its agreement late Monday to extend its production cut agreement for a further nine months.
In a press statement released after OPEC's 176th meeting in Vienna on Monday, the cartel said; "economic bearishness is now increasingly prevalent, with major challenges and mounting uncertainties related to ongoing trade negotiations, monetary policy developments, as well as geopolitical issues."
OPEC also revised down its oil demand growth for 2019 to now stand at 1.14 million barrels a day (mb/d), while non-OPEC supply in 2019 is expected to grow at a robust pace of 2.14 mb/d year-on-year.
"In view of the current fundamentals and the consensus view on the outlook for the remainder of 2019, the conference decided to extend the voluntary production adjustments agreed at the 175th Meeting of the OPEC Conference for an additional period of nine months from 1 July 2019 to 31 March 2020," the cartel said.
The 6th OPEC and non-OPEC Ministerial Meeting on Tuesday with the attendance of countries from OPEC+ including Russia will follow the meeting on Monday.
Last week Russian President Vladimir Putin indicated that the supply cut deal "would be extended in its current form and with the same volumes" following his meeting with Saudi Crown Prince Mohammed bin Salman.
The first OPEC and non-OPEC was held in December 2016, where the cartel and 11 non-OPEC oil producing countries for the first time agreed to accelerate the stabilization of the global oil market through voluntary production adjustments, which amounted to approximately 1.8 million barrels per day. The first agreement was effective for an initial period of six months.
By Ebru Sengul