The Organization of Petroleum Exporting Countries (OPEC) and its allies agreed Saturday to extend their current oil production cut agreement for an additional month.
Saudi Arabia-led OPEC and Russia-spearheaded non-OPEC had agreed on April 12 to cut their total crude production by 9.7 million barrels per day (bpd) from May 1 to June 30 to mitigate coronavirus-related low global oil demand and oversupply.
Oil producing nations of the 23-member group known as OPEC+ agreed on Saturday to extend the period of the agreement for one more month until the end of July 31.
However, some member countries that failed to reach full conformity with their production cut quotas in May and June will have to accommodate their curbs in July, August and September, in addition to their already agreed production adjustment for such months, OPEC said.
OPEC+ said in a statement it is vital that all major producers remain fully committed to efforts aimed at balancing and stabilizing the global oil market.
'The production adjustments in May, as well as the gradual relaxation of many of the lockdown measures as a result of the COVID-19 pandemic across the globe and an economic pick-up, had contributed to a cautious recovery and the return of more stability in the oil market,' OPEC said in a statement.
'Nevertheless, with global oil demand expected to contract by around 9 million bpd for the whole of 2020, consolidating this gradual recovery will require continued commitment and intensified efforts from participating countries and all major producing countries,' it added.
OPEC's next ordinary meeting will be in Austrian capital Vienna on Nov. 30, while non-OPEC ministerial meeting will convene on Dec. 1.
The Joint Ministerial Monitoring Committee (JMMC), which closely reviews market conditions, members' oil production levels and conformity levels, will next meet on June 18 and it will monthly convene until December 2020.
By Ovunc Kutlu