OPEC, Russia meet to extend record oil production cuts: Reports

OPEC and its Russia-led allies will meet on June 6 to approve record oil production cuts and urge countries like Iraq and Nigeria to enhance their compliance with the existing curbs. According to reports, the producers collectively known as OPEC+ had previously agreed to reduce the oil supply by a record 9.7 million barrels per day in May and June to boost the prices that had drastically plunged due to the ongoing coronavirus outbreak. These cuts are now getting narrower to 7.7 million barrels every day from July to December.

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International media agency cited OPEC+ sources who said that Saudi Arabia and Russia have jointly decided in favour of extending the cuts throughout the next month while Riyadh would support these cuts throughout August. The global benchmark of Brent crude had crashed below $20 per barrel in April but it spiked to nearly six per cent on June 5 to start trade at $42 which was a three-month high.

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The OPEC has said on June 5 that the video conferences among the members of the Organisation of the Petroleum Exporting countries will start on June 6 at 1200 GMT and they will be followed by a gathering of the OPEC+ group at 1400 GMT. According to reports, the OPEC+ sources have said that the cuts would be extended as it is necessary to comply with the oil-producing countries that produced more than their quota in May and June. Therefore, they must compensate by cutting more in the upcoming months. 

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Oil markets suffer 'historic shock'

Amid the COVID-19 pandemic, the Organization of the Petroleum Exporting Countries (OPEC) had previously said that it suffered a “historic shock” due to the impact of the global health crisis. Not only did the OPEC noted the repercussions were “unprecedented” but also said they are “abrupt” and also “extreme”.

“The oil market is currently undergoing historic shock that is abrupt, extreme and at global scale,” said the group of producer nations.

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(Image Source: AP)