The Organization of the Petroleum Exporting Countries (OPEC) has agreed to extend oil production cuts until March 2020, during their meeting in Vienna on July 1.
Meanwhile, forecasted oil demand growth for 2019 has been declined to 1.14 million barrels per day (b/d), while non-OPEC supply is expected to grow at a robust pace of 2.14 million b/d, year-on-year, according to OPEC.
Prior to the meeting, the UAE expressed a positive sentiment and expected productive outcomes from the OPEC summit, according to Suhail Al-Mazroui, the UAE Energy Minister, who tweeted that he was “confident the alliance will reach a decision that will restore oil market balance.”
Saudi Arabia and Russia recently agreed to extend the output cut deal by another six to nine months during a meeting between Saudi Crown Prince Mohamed Bin Salman and Russian President Vladimir Putin on the sidelines of the 2019 G20 Osaka summit in Japan.
It is worth noting that OPEC members and other non-OPEC major producers, led by Russia, agreed in November 2016 to cut crude output by 1.8 million barrels per day (b/d), the deal was extended in November 2017 until the end of 2018 instead of March. The deal was extended again from January to June 2019, with a production cut of 1.2 million b/d, after it helped crude oil prices restore their highest levels since the 2014 downturn.