Organization of Petroleum Exporting Countries (OPEC) has recommended extending oil production cuts until the end of 2020 due to the negative impact of the coronavirus outbreak on global oil demand.
Illustration; Author: SP Mac
The Minister of Energy of Algeria and President of the OPEC Conference in 2020, Mohamed Arkab , has said that following an extraordinary meeting of the Joint Technical Committee (JTC) held in Vienna, from 4-6 Feburary 2020, the JTC has recommended extending voluntary production adjustments under the ‘Declaration of Cooperation’ process until the end of 2020 and to proceed with an additional adjustment until the end of the second quarter.
To remind, Saudi Arabia together with other OPEC members and Russia last December decided on deeper production cuts for the first quarter of 2020 as part of an attempt to prevent oversupply and support oil prices.
The President of the Conference said in a statement on Saturday, February 8 that JTC’s new recommendations came in response to the fact that the coronavirus epidemic “has had a negative impact on oil demand and oil markets.”
“The coronavirus epidemic is having a negative impact on economic activities, particularly on the transportation, tourism and industry sectors, particularly in China, and also increasingly in the Asian region and gradually in the world,” he added.
In response, the JTC has recommended extending the current production adjustments until the end of 2020.
The Committee also recommended a further adjustment in production until the end of the second quarter of 2020. The Minister stressed that he “supports the conclusions of the JTC.”
Arkab intends “to continue his consultations with OPEC Member Countries and non-OPEC countries participating in the ‘Declaration of Cooperation’ to seek consensual solutions, on the basis of the said proposal of the Technical Committee, to rapidly stabilize the oil market and deal with the current situation.”
The Minister stressed that “the situation is clear; it requires corrective action in the interest of all.”
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