Advisors of the Organization of the Petroleum Exporting Countries and Russia recommended to cut oil production for 600,000 barrels per day. Russia took time for a final decision.
OPEC+ (that is OPEC and Russia) expects that reaching an agreement with recommendations could at least stop price drop of “black gold“, which is caused by economic consequences of coronavirus epidemic. Further economic slowdown of China’s economy, drop in oil demand as well as oil price drop is expected due to the epidemic.
“The recommendation is for a cut of 600,000 barrels per day. Russia has asked for more time for consultations,” a source close to OPEC said to Reuters. Another source mentioned that approval of the proposal would mean immediate oil production restrictions, which would last at least to June.
Prior proposals mentioned cut of 500,000 barrels per day. Yet, the current agreement reflects expected return of Libyan oil to markets as well as expected drop in demand for oil. Final decision should be announced in the end of next week when Energy Ministers of member countries meet.
