The Organization of the Petroleum Exporting Countries (OPEC) could extend its oil production cuts until the end of 2020, an OPEC source told TASS, the Russian News Agency, according to Oil Price.
It is worth mentioning that OPEC and its allies, OPEC+, agreed to cut production by 1.2 million barrels per day (mmbbl/d) in 2019, and they decided to cut production even further by an additional 500,000 bbl/d in December 2019.
In order to fully commit to the agreement, Saudi Arabia compensated for the members that did not comply with their quotas in the agreement. Moreover, it is expected that the kingdom will continue its compensation by cutting more 400,000 bbl/d, in addition to its original quota.
OPEC will have to address the market’s oversupply in H1 2020, and the cartel is likely to extend production cuts through the end of 2020, Sushant Gupta, Research Director – Asia Pacific, Refining and Oils Market at Wood Mackenzie, told CNBC.