Vienna (dpa) - Opec and its cooperation partners (Opec +) have agreed to extend the current reduction in their oil production by another month. This was announced by the oil cartel on Saturday after negotiations in Vienna.
At the video conference, the participating countries voted for oil production to be cut by around ten million barrels (159 liters each) in July, too. This should help to make the falling oil prices rise again. Opec expects a sharp drop in oil consumption due to the economic consequences of the corona crisis.
The cartel also said that the existing agreement had contributed to a “preliminary recovery in the global economy and the oil market”. All major producers should now continue to commit to stabilizing the market.
The major oil producing countries want to take the step to stop the price decline in the corona crisis. The Organization of Oil-producing States (Opec) and the other countries agreed in April to cut oil production by 9.7 million barrels a day for the months of May and June.
After the end of the negotiations, Russian energy minister Alexander Nowak emphasized that the targets had to be met 100 percent in July. April was the worst month on the oil market, but the situation had improved. «We see a positive effect of joint actions. But the market is still in a fragile state and needs support, »he said according to the Tass agency. The agreements should now continue to have a positive impact on the stabilization of the energy market, said Kremlin spokesman Dmitri Peskow.
The negotiations on Saturday went surprisingly quickly for observers. The talks in the spring had initially ended without an agreement, and shortly afterwards the negotiations dragged on until late at night. Before the negotiations, the Russian side also said it would be a "long and difficult night".
Mexico decided not to go through with the extension. Minister of Energy Rocío Nahle told journalists on the verge of visiting a petrochemical plant together with President Andrés Manuel López Obrador. On Twitter, she stressed that the North American country remains open to dialogue. López Obrador had previously said that he did not want to further reduce the funding. Mexico adheres to the April agreement. At that time, the country, which is not an OPEC member, had already delayed an agreement - Mexico insisted on contributing only 100,000 barrels of subsidy cuts per day instead of the required 400,000 barrels.
Venezuelan oil minister Tareck El Aissami tweeted on the agreement: "This will have a real impact on energy stability and fair prices on the oil market, and will be the starting point for economic recovery."
"These adjustments brought the much-needed relief to the market and we saw a cautious recovery," said Algerian Minister of Energy and Opec Conference chairman Mohamed Arkab at the beginning of the talks on Saturday. "The prospects for both supply and demand have improved in recent weeks." So far, the countries involved have kept the agreement to a high degree.
Market observers had expected Opec agreement. However, the cartel does not want to push prices up too much. That could put the US competition back into play, which could produce at a price beyond $ 40 a barrel to cover costs.
Tweet from the Mexican minister
Tweet from the minister from Venezuela
Communication from Opec