OPEC and its allies agree to boost production and rebound in on-demand betting

OPEC and its allies agree to boost production and rebound in on-demand betting

OPEC and an alliance of other major oil producers have agreed to increase their collective production by more than two million barrels a day over the next few months, betting on demand recovery as they and themselves the rest of the world are assessing the economic consequences of the trajectory of the pandemic.
The Organization of the Petroleum Exporting Countries and a group of other major Russian-led producers agreed to increase production in May by 350,000 barrels a day, and by the same amount again in June, delegates said. They then agreed to increase production by an additional 450,000 barrels per day in July. Saudi Arabia, meanwhile, has agreed to start easing the separate one-million-barrels-per-day unilateral cuts it implemented earlier this year. He plans to end those cuts completely by the end of July, delegates said.
The agreement Thursday between the two groups, jointly referred to as OPEC +, was a compromise between Saudi Arabia, the de facto leader of OPEC, and Russia. Saudi Arabia had sought to maintain the cuts, skeptical of a rapid return in demand for oil during the pandemic. Russia, meanwhile, said the world already needs more oil to fuel resurgent economies in many regions.
The move is another blow to OPEC’s zigzag oil strategy over the past year, underscoring the difficulty among group forecasters – and elsewhere – to call the start of a sustained global recovery. of the pandemic.
Ahead of the meeting between the two groups, Saudi Arabia initially supported plans to keep production unchanged, delegates said. The decision to increase production “was a complete U-turn,” one said. Throughout the pandemic, the group appeared to switch sharply from optimism to pessimism about the prospects for a post-pandemic economic recovery and a strong rebound in demand for oil. Saudi Arabia urged to remain cautious, while Russia insisted on increasing production.


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