Opep +: one month extension of the current crude supply

According to the Minister of Energy of the United Arab Emirates, OPEC members and their allies agreed on Saturday to extend the current reduction in oil production decided in April by one month. REUTERS / Nick Oxford / File Photo

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According to the Minister of Energy of the United Arab Emirates, OPEC members and their allies agreed on Saturday to extend the current reduction in oil production decided in April by one month. The producing countries had agreed in the middle of a pandemic to reduce by around 10% the world supply, in order to bring up the crude prices in free fall because of the containment.

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On April 12, OPEC member countries and their allies agreed to reduce black gold production by 9.7 million barrels per day between May and June, then by 7.7 million in July to December. But faced with low prices, they finally decided to maintain the sharpest reduction until the end of July.

It is a pragmatic decision, taken in the interest of all members. Because the consumption of crude oil in the world remains far below the supply despite that many regions of the world are in deconfinement.

This policy of reducing production has indeed shown its effectiveness since prices rose in early June around 40 dollars per barrel. Around April 20, they had reached a historically lowest level, hitting the 15 dollar mark for Brent and even being negative for American oil.

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