ALGIERS-The Organization of Petroleum Exporting Countries (OPEC) and its allies on Friday will discuss a 1.5 million barrels per day (bpd) cut until late June in order to mitigate the fall in prices caused by the coronavirus epidemic.
“It also agreed to recommend to the 8th OPEC and non-OPEC Ministerial Meeting a further adjustment of 1.5 mb/d until 30 June 2020 to be applied pro-rata between OPEC (1.0 mb/d) and non-OPEC producing countries (0.5 mb/d) participating in the Declaration of Cooperation,” said the final statement of the 178th (Extraordinary) Meeting of the Conference held Thursday under the chairmanship of Energy Minister.
Accordingly, “in view of the current fundamentals and the consensus on market perspectives,” the Conference decided to recommend to the 8th OPEC and non-OPEC Ministerial Meeting to extend the adjustment levels agreed at the 177th Meeting of the Conference and the 7th OPEC and non-OPEC Ministerial Meeting for the remainder of the year.
The proposal to be submitted to the ten Non-OPEC countries consists in a total decrease by 3.2 million barrels per day during the second half of 2020 and 1.7 million barrels per day for the second half of the same year.
“The COVID-19 outbreak has had a major adverse impact on global economic and oil demand forecasts in 2020, particularly for the first and second quarters. Global oil demand growth in 2020 is now forecast to be 0.48 mb/d, down from 1.1 mb/d in December 2019,” said the source.
According to the OPEC statement, “member Countries reaffirmed their continued focus on fundamentals for a stable and balanced oil market, in the interests of producers, consumers, and the global economy. The Conference emphasized the ongoing dialogue with consuming countries, and the consultations undertaken in a collegial spirit before reaching decisions. Member Countries are resolute and committed to being dependable and reliable suppliers of crude and products to global markets.”
The Conference took note of the announcement from Ecuador that it has withdrawn from its Membership of OPEC, with effect from 1 January 2020.
The Conference recalled the First OPEC Summit held from the 4-6 March 1975, exactly 45 years ago, in Algeria. The Summit saw the establishment of OPEC’s sister organization, the OPEC Fund for International Development.