OPEC wants to expand cuts in oil production

Sources told Reuters last Monday (2), that OPEC (Organization of Petroleum Exporting Countries) and its allies plan to deepen oil production cuts and close a deal for them to follow at least until June 2020. The proposal would add at least 400,000 barrels per day (bpd) to the cuts already settled, of 1.2 million bpd, or 1.2% of the global supply.

According to other sources, opec’s latest analysis, carried out council of the economic commission of the group, pointed out the great oversupply and a increase in inventories in the first half of 2020, if no cuts are made Additional.

Despite Russia opposing the cuts, the Saudis are trying to convince them, since the decision would benefit both. The government saudi needs higher oil prices to balance its budget and support the pricing of the initial stock offering (IPO) of the Aramco, who may be the largest in the world.

As a key ally of non-OPEC countries, Russia would benefit from higher prices and has worked with OPEC to avoid forming oversupply amid growing U.S. production, which has become the global leader in supply.