OPEC extends production-cut targets for 9 months

Members of the Organization of Petroleum Exporting Countries said they agreed to extend their oil production cuts by 9 months to support oil prices amid a weakening world economy.

Jul 3rd, 2019

Members of the Organization of Petroleum Exporting Countries said they agreed to extend their oil production cuts by 9 months to support oil prices amid a weakening world economy.

Saudi Arabia’s Energy Minister Khalid al-Falih said the cartel recognizes that this year’s first quarter was a period of slow demand. The agreement will go to approval from non-OPEC allies, including Russia, at a July 2 meeting in Vienna.

Al-Falih said a new charter of cooperation was drafted and will be published. Ahead of the July 1 meeting, OPEC had been widely expected to extend cuts by at least 6 months.

Iraq’s Oil Minister Bijan Zanganeh already told reporters in Vienna he had “no problem” with supporting oil supply cuts by 9 months.

OPEC and some non-OPEC producers have been reducing oil production since 2017 to support oil prices worldwide.

Al-Falih said he would like world oil inventories to be in the level they were in 2010-14 rather than what he called a “bloated 5-year average.”

Contact Paula Dittrick at pdittrick@endeavorb2b.com.

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