OPEC + to Hold Another Meeting on Sunday

• OPEC + to Hold Another Meeting on Sunday

The Organisation of the Petroleum Exporting Countries (OPEC) and allies will meet on Sunday to discuss the current standoff between members on production cuts.

The virtual meeting, according to six OPEC sources, will hold on Sunday evening in a move to reduce global oil glut and prop up oil prices.

OPEC and allies, known as OPEC+, agreed on Thursday to cut oil production by 10 million barrels per day, however, Mexico, one of the member nations required to reduce oil production by 23 percent in May and June refused, putting the entire agreement on hold.

OPEC+, in a statement released few hours after Thursday’s meeting said, in view of the current fundamentals, the participating member nations “reaffirm the Framework of the Declaration of Cooperation, signed on 10 December 2016 and further endorsed in subsequent meetings; as well as the Charter of Cooperation, signed on 2 July 2019.

“Adjust downwards their overall crude oil production by 10.0 mb/d, starting on 1 May 2020, for an initial period of two months that concludes on 30 June 2020.

“For the subsequent period of 6 months, from 1 July 2020 to 31 December 2020, the total adjustment agreed will be 8.0 mb/d. It will be followed by a 6.0 mb/d adjustment for a period of 16 months, from 1 January 2021 to 30 April 2022.

“The baseline for the calculation of the adjustments is the oil production of October 2018, except for the Kingdom of Saudi Arabia and The Russian Federation, both with the same baseline level of 11.0 mb/d. The agreement will be valid until 30 April 2022, however, the extension of this agreement will be reviewed during December 2021.”

Oil prices dropped from $36 per barrel to $31 on Friday despite the announcement as traders doubt the 10 million barrels per day cut would be enough to clear global oil glut estimated at about 35 million barrels per day.

The digital meeting will be held at 1600 GMT, according to Reuters.