OPEC’s secretary-general said the group is encouraged by a rally in oil prices and strong adherence to its latest output cut. To support the market, however, the group has not ruled out further steps, sources said.
To offset a slump in prices and demand caused by the coronavirus outbreak, OPEC+ (the OPEC, Russia and other allies) are cutting supply by a record 9.7 million bpd from May 1.
Since hitting a 21-year low below $16 in April, oil prices LCOc1 have more than doubled. So far in May, oil exports have been slashed by OPEC+ by about 6 million bpd, suggesting a strong start in complying with the deal. Mohammad Barkindo, OPEC’s secretary-general, said the oil markets have responded positively to the historic agreement.
Next month OPEC+will meet virtually to review the agreement when the group will have a full month’s data on compliance. Rather than scaling it back from July as currently agreed, sources said OPEC+ may keep the current level of supply reduction after June.
