During the weekend, the 179th meeting of the OPEC was held via e-conferencing on Saturday, 6th of June, 2020, under the leadership of its president, Mohamed Arkab, Minister of Energy in Algeria.
The OPEC led by Saudi Arabia and other key oil producers has agreed to extend the 9.7 mbpd deal to the end of July, instead of reducing it to 7.7 million bpd widely projected by experts. The current cut, which went into effect on 1st of May, 2020 will now run until the 31st of July, 2020 in hopes of stabilizing oil markets. This agreement is expected to further bolster global oil prices and reduce supplies weighing on market outlook.
Earlier Asian session on Monday, oil prices were up more than 1% after OPEC and major producers agreed to extend a deal on record output cuts to the end of July. The earlier supply cuts and a rebound in demand have helped oil prices double since April. The oil prices also supported by data showing that China's crude imports hit an all-time high in May.
Oil prices reverse early gains
Meantime during the European session on Monday, Saudi Arabia said at a press conference that those extra reductions will last just one month as planned, wouldn’t continue with additional, deeper curbs after June. Oil prices reversed from the earlier gains and trading session low, with US oil futures falling to $38.80 a barrel and Brent crude to $41.80 a barrel after the announcement. The Saudi minister also said that Iraq will deliver only 80% of pledged cuts in June and will compensate later.
On Saturday, Saudi Arabian Energy Minister Abdulaziz bin Salman said: “with the reopening of economies with high oil consumption after quarantine, the demand is returning, but the difficulties continue and we have not yet survived the danger”. “Today we have grounds to be cautiously optimistic about the future, but we are not out of the woods yet and challenges ahead remain to be seen,” he added.
The next OPEC meeting will take place in the usual offline format in Austria's Vienna on November 30, the organization said on Saturday in a press release. "The Conference confirmed that its next Ordinary Meeting will convene in Vienna, Austria, on 30 November 2020, and noted that September 2020 will mark the 60 Year Anniversary since the founding of OPEC in Baghdad in 1960," the press release read.