Non-OPEC members back cartel’s extension of production cuts

International

Khalid Al-Falih, Minister of Energy, Industry and Mineral Resources of Saudi Arabia stands prior to the start of a meeting the Organization of the Petroleum Exporting Countries, OPEC, at their headquarters in Vienna, Austria, Monday, July 1, 2019. (AP Photo/Ronald Zak)

VIENNA (AP) — OPEC members won the support Tuesday of other major oil producing nations to extend a production cut for another nine months in a bid to shore up prices at a time of waning demand.

Member nations of the Organization of the Petroleum Exporting Countries on Monday agreed to the extension. With strong backing from Russia, the biggest member of the non-OPEC group meeting Tuesday, the others unanimously approved the proposal.

“In order to help maintain the current stable status of the market and avoid buildup of inventories, we have decided to keep the level and the magnitude of the cuts intact,” Russian Energy Minister Alexander Novak told the forum after the vote.

The 10 non-OPEC nations present at the meeting at OPEC’s headquarters in Vienna also included Mexico, Bahrain, Oman and Kazakhstan. The United States, one of the world’s major oil producers, is not involved in the discussions and won’t be bound by any agreement.

Opening the Tuesday meeting, Novak urged approval of the extension.

“In the current unstable market and the huge uncertainty we are seeing, our coordinated action aimed at consecutive and stable supply to the market and ensuring its stability are key to give us longer visibility,” Novak said.

Heading into the meeting, OPEC heavyweight Saudi Arabia said the nine-month extension was the right move to make given the current market conditions.

“I see demand picking up strongly in the second half of the year and I see compliance greatly improving,” Saudi Arabia’s Energy Minister Khalid Al-Falih told reporters. “And I see the length of this agreement as nine months sufficiently long to bring inventories down and to balance the market.”

The current deal to support prices reduced production by 1.2 million barrels per day starting from Jan. 1 for six months, and will now run into next year with the extension. Most of the cuts came from OPEC nations, who agreed to reduce 800,000 barrels per day, with the rest of the cuts coming from Russia and other non-OPEC countries, though not from the United States.

The cuts were aimed to put upward pressure on the price of oil and reduce oversupply.

Though tensions between the U.S. and Iran and attacks on tankers near the Strait of Hormuz have pushed up oil prices in recent days, there are concerns among members that over the longer term demand could weaken due to slower global growth. The International Energy Agency, a group of oil consuming countries, cut its demand estimate earlier this month.

The price of Brent crude, the international standard, dropped 0.5 percent Tuesday to $64.76 a barrel.

_____

Rising reported from Berlin

Copyright 2019 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Don't Miss

More Don't Miss

Trending Stories

Turkey Day Giveaway

Days

Hours

Minutes

Seconds

Recent Videos

Rage Yoga

Thumbnail for the video titled "Rage Yoga"

First Step remembers those who faced domestic violence at annual Domestic Violence Awareness Month vigil

Thumbnail for the video titled "First Step remembers those who faced domestic violence at annual Domestic Violence Awareness Month vigil"

First Step remembers those who faced domestic violence at annual Domestic Violence Awareness Month vigil

Thumbnail for the video titled "First Step remembers those who faced domestic violence at annual Domestic Violence Awareness Month vigil"

Lawton, WF Chambers of Commerce officials talk 2020 economic growth plans

Thumbnail for the video titled "Lawton, WF Chambers of Commerce officials talk 2020 economic growth plans"

Texoma officials to recognize 'Imagine a Day Without Water' to emphasize conservation

Thumbnail for the video titled "Texoma officials to recognize 'Imagine a Day Without Water' to emphasize conservation"

Prop 4 would make it harder for Texas to implement personal income tax

Thumbnail for the video titled "Prop 4 would make it harder for Texas to implement personal income tax"

Search for 90-pound Texoma tortoise sparks social media storm

Thumbnail for the video titled "Search for 90-pound Texoma tortoise sparks social media storm"

WFPD investigates church vandalism

Thumbnail for the video titled "WFPD investigates church vandalism"

UPDATE: 32 animals seized from Wichita Co. residence

Thumbnail for the video titled "UPDATE: 32 animals seized from Wichita Co. residence"

4-year-old saves drowning sister

Thumbnail for the video titled "4-year-old saves drowning sister"

Pure Horror: Blood flood fills Iowa family's basement!

Thumbnail for the video titled "Pure Horror: Blood flood fills Iowa family's basement!"

Fighting For Their Flag: Family Takes On HOA

Thumbnail for the video titled "Fighting For Their Flag: Family Takes On HOA"
Get FREE Text Alerts
Report It

Latest News

More Local News