In an effort to boost crude prices, the Opec+ group has agreed to extend many of its production restrictions into next year.
The Opec cartel, along with its allies, including Russia, decided at a ministerial gathering in Riyadh, on Sunday to extend the cut of 2m barrels per day, until the end 2025 rather than the end 2024.
Opec released a statement in which it said that the group agreed to “extend overall crude oil production levels for Opec countries and non-Opec participants… from 1 January 2025 through 31 December 2025.”
Opec+ agreed to extend voluntary cuts to other members, in order to help support the oil price amid a weakening global demand.
Saudi Arabia, Russia and the United Arab Emirates gathered at the Riyadh Meeting to pledge their voluntary additional cuts of 1,65m barrels per day until the end December 2025.
The second set of voluntary reductions totaling 2.2m barrels per daily (bpd) announced in November 2020 will now be extended to the end of September 2019 and then phased-out over the next 12 months.
Saudi Arabia’s Ministry of Energy said that the cuts are intended to “support stability and balance on oil markets”.
Opec has also set a new production target for the UAE. It will allow it to increase its current 2.9m bpd output by 300,000.
Brent crude oil prices fell last month. They dropped from nearly $88 (£69), a barrel, at the end April to $81.62 a barrel by the end May.
Saudi Arabia, Opec’s largest oil producer, has begun the sale of 1,545m shares of the Aramco producer, a majority state-owned company. This could raise up to $12 billion.
The secondary share sale follows five years after Aramco’s initial public offering , the largest ever. The sale runs until Thursday and investors showed a lot of interest on Sunday, when the demand for shares exceeded the number available.
Bill Blain is the market strategist for Wind Shift Capital. He said that Saudi Arabia uses its wealth in oil reserves to innovate its economy and diversify it.
He added that “although some of the projects at core of the reinvention Saudi Arabia have been scaled back because of escalating cost, and its purchase is of global sports franchises are generally misunderstood,” the plan was to fuel the country’s economy by abundant investment from the SWF (Public Investment Fund).
Post Disclaimer
The following content has been published by Stockmark.IT. All information utilised in the creation of this communication has been gathered from publicly available sources that we consider reliable. Nevertheless, we cannot guarantee the accuracy or completeness of this communication.
This communication is intended solely for informational purposes and should not be construed as an offer, recommendation, solicitation, inducement, or invitation by or on behalf of the Company or any affiliates to engage in any investment activities. The opinions and views expressed by the authors are their own and do not necessarily reflect those of the Company, its affiliates, or any other third party.
The services and products mentioned in this communication may not be suitable for all recipients, by continuing to read this website and its content you agree to the terms of this disclaimer.