Opec+ deal to extend output cut a courageous decision: Al Mazrouei

ABU DHABI / AGENCIES

During a video conference, Opec+ alliance agreed to extend production cut to the end of July.
The videoconference meeting was held in an atmosphere of cooperation and a collective determination to maintain a balance in the oil market, Suhail bin Mohammed Faraj Faris Al Mazrouei, Minister of Energy and Industry, wrote on Twitter.
“The UAE is proud of its supportive role to the alliance of oil producing countries who made a courageous decision and a collective effort that deserves praise from all participating producing countries,” he added.
Al Mazrouei thanked Chairmanship of HRH Prince Abdul Aziz Bin Salman, Saudi Arabia’s Minister of Energy, and co-Chair Alexander Novak, Minister of Energy of the Russian Federation for the efforts made to reach the agreement.

Opec+ deal
The deal will underpin the oil market’s recovery, easing the financial pain felt by resource-dependent emerging economies, shale explorers in Texas, and blue-chip companies such as Royal Dutch Shell Plc. Brent crude prices could rise to as much as $50 a barrel from June 5 closing price of $42.30, according to
consultant Wood Mackenzie Ltd.
It’s a victory for Saudi Arabia and Russia. The two leaders of Opec+ showed that they intend to keep a close watch on the oil market. The group’s monitoring committee will now meet every month to assess the balance between supply and demand amid an uncertain economic recovery from the global pandemic.
“Our collective efforts have borne fruit, and despite many uncertainties, there are encouraging signs that we are over the worst,” said Saudi Energy Minister Prince Abdulaziz bin Salman. “Demand is returning as big oil-consuming economies emerge from pandemic lockdown.”
After a video conference lasting several hours, delegates said all nations had signed off on a new deal for a production cut of 9.6 million barrels a day next month. That’s 100,000 barrels a day lower than the reduction in June because Mexico will end its supply constraints, but a tighter limit than the 7.7 million barrels a day set for July in the group’s previous agreement.
In addition, any member that doesn’t implement all its production cuts in May and June will make extra reductions from July to September to compensate, according to an Opec
communique.
The oil market “is still in a fragile state and needs support,” Russia’s Energy Minister Alexander Novak said in opening remarks at the virtual meeting. “That is why today more than ever it is important to adhere to 100% compliance.”