WASHINGTON (dpa-AFX) - The Saudi Arabia-led OPEC and a 10-nation coalition led by Russia called OPEC+ have agreed to deeper oil production cuts in order to prevent oversupply. The new deal will apply for the first three months of 2020.
The oil exporting countries have recommended to deepen the cuts by 500,000 bpd to existing cuts of 1.2 million bpd. A cut of 1.7 million bpd would amount to 1.7% of global supply.
Saudi Arabia was more interested in reducing output as the Arab country needed to anchor oil prices just before the IPO of the state-run oil company Saudi Aramco.
Existing supply curbs of 1.2 million barrels per day, which prevents excess supply, was set to expire in March.
'We really do see some risks of oversupply in the first quarter due to lower seasonal demand for refined products and for crude oil,' Russian Energy Minister Alexander Novak said, according to Reuters.
He said cuts would last through the first quarter of 2020, a shorter timeframe than suggested by some OPEC ministers, who have called for extending cuts until June or December 2020.
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