Oil futures up after major producers agree to production cut
by ChemOrbis Editorial Team - content@chemorbis.com
Oil futures rose on Monday after OPEC, Russia and other producers collectively known as OPEC+ agreed to reduce output to support prices.
The production cut “recognised the commitment of the producers in the OPEC+ group to stabilise energy markets and acknowledged the importance of international cooperation in ensuring the resilience of energy systems,” OPEC said in a press release.
The participating countries will lower their overall crude oil production by 9.7 million barrels/day from May 1, 2020 for an initial period of two months concluding on June 30, OPEC said.
For the subsequent six months to end-December, the agreed cut will be 7.7 million barrels/day followed by 5.8 million barrels/day reduction for the 16 months from January 2021 to end-April 2022, the organisation added.
OIl futures gained in reaction to the development.
At 10.25 am Singapore time (02.25 am GMT) on Monday, WTI May futures were up 5.6% at $24.03/bbl while Brent June futures were up 4.7% at $32.96/bbl.
Worldwide fuel demand has fallen sharply as tight lockdowns to prevent the spread of COVID-19 have kept most people in their homes.
The production cut “recognised the commitment of the producers in the OPEC+ group to stabilise energy markets and acknowledged the importance of international cooperation in ensuring the resilience of energy systems,” OPEC said in a press release.
The participating countries will lower their overall crude oil production by 9.7 million barrels/day from May 1, 2020 for an initial period of two months concluding on June 30, OPEC said.
For the subsequent six months to end-December, the agreed cut will be 7.7 million barrels/day followed by 5.8 million barrels/day reduction for the 16 months from January 2021 to end-April 2022, the organisation added.
OIl futures gained in reaction to the development.
At 10.25 am Singapore time (02.25 am GMT) on Monday, WTI May futures were up 5.6% at $24.03/bbl while Brent June futures were up 4.7% at $32.96/bbl.
Worldwide fuel demand has fallen sharply as tight lockdowns to prevent the spread of COVID-19 have kept most people in their homes.
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