ECONOMY


OPEC oil output sinks as Saudi deepens cuts and others cut more, survey shows

Baku, July 2, AZERTAC

OPEC oil output hit the lowest in two decades in June as Saudi Arabia and other Gulf Arab members made larger cuts, a Reuters survey found, pushing group compliance in a supply reduction pact above 100% despite incomplete adherence by Iraq and Nigeria, according to Reuters.

The 13-member Organization of the Petroleum Exporting Countries pumped 22.62 million barrels per day (bpd) on average in June, the survey found, down 1.92 million bpd from May’s revised figure.

OPEC and its allies in April agreed to a record output cut to offset a slump in demand caused by the coronavirus crisis. An easing of lockdowns and lower supply have helped prices LCOc1 climb above $40 from April’s 21-year low of below $16 a barrel.

“Demand is expected to pick up in the second half of the year and there is a general consensus that the OPEC+ group will live up to expectations and will achieve high compliance in June and July,” said Tamas Varga of oil broker PVM.

OPEC, Russia and other producers, a group known as OPEC+, agreed to cuts of 9.7 million bpd, or 10% of global output, from May 1. OPEC’s share, to be made by 10 members from October 2018 levels in the case of most countries, is 6.084 million bpd.

So far in June, they delivered 6.523 million bpd of the pledged reduction, equal to 107% compliance, the survey found. Compliance in May was revised up to 77%.

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