Members of Organization of Petroleum Exporting Countries (OPEC) have recommended the group and its allies in non-OPEC countries further reduce their total oil production by an additional 1.5 million barrels per day (bpd) on Thursday.
After the conclusion of the 178th (extraordinary) meeting of the OPEC conference held in the Austrian capital Vienna, OPEC member states recommended a further adjustment in oil output to be agreed at the 8th OPEC and non-OPEC ministerial meeting on Friday.
The recommendation will be an additional 1.5 million bpd of reduction in the total output of OPEC and non-OPEC countries to run until June 30, 2020, according to an OPEC statement released after the extraordinary meeting.
According to the proposal, the additional production curb will be distributed between OPEC and non-OPEC on a 2-to-1 ratio, as the former will further reduce its output by 1 million bpd, while the latter was recommended to make an additional cut of 0.5 million bpd.
It is not yet clear how non-OPEC oil-producing countries, especially Russia, will respond to the proposal until Friday.
However, if the group, dubbed as OPEC+, fails to make additional cuts in their production, the supply glut would increase in the global oil market, which is now facing low oil demand from the coronavirus (Covid-19) weakening global oil consumption.
"Global oil demand growth in 2020 is now forecast to be 0.48 million bpd, down from 1.1 million bpd in December 2019," OPEC said in the statement.
"Moreover, the unprecedented situation, and the ever-shifting market dynamics, means risks are skewed to the downside," it added.
By Ovunc Kutlu