OPEC Discusses Further Oil and Gas Production Changes

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The Organization of Petroleum Exporting Countries members would gather this week to debate whether to cut oil production further as the spread of coronavirus hits demand for crude in the market.

Though, OPEC and its allies, led by Russia, a group known as OPEC+, agreed in December 2019 to a collective cut in the output of 1.7 million barrels per day until the end of March.

Saudi Arabia, the world’s biggest oil exporter has been voluntarily cutting an additional 400,000 bpd, meaning OPEC+ is effectively curbing its production by 2.1 million bpd in a bid to support oil prices globally.
Meanwhile, the spread of coronavirus has weighed on economic activity worldwide and hit the demand for oil.

And, the international oil benchmark, Brent crude has been on a downward trend since the coronavirus broke out in China. It tumbled below the $50 per barrel mark last Friday for the first time in two and a half years but rose to $52.12 per barrel as of 7:15 pm Nigerian time on Tuesday.

Moreover, OPEC ministers would meet on March 5 and then gather with ministers from non-OPEC countries on March 6.

A technical committee of the alliance met on Tuesday to review market fundamentals while a ministerial committee would assemble on Wednesday at 1130 GMT.

Russia is so far not convinced about the need for a bigger cut in production and some sources have said OPEC members could shoulder any additional curbs themselves in the oil and gas sector.

Nonetheless, on Tuesday Leonid Fedun, vice-president of Russia’s second-biggest oil producer, Lukoil, disclosed  to Reuters that an additional cut of up to one million bpd would be enough to balance the market and lift oil prices to $60 a barrel.



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