InvestorQ : Will supply cuts of crude oil production by OPEC and Russia continue in the coming months?
Juvina Maggie made post

Will supply cuts of crude oil production by OPEC and Russia continue in the coming months?

Answer
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Angel dcosta answered.
3 months ago


While there is no official confirmation, both OPEC and Russia may look to extend supply cuts by another couple of months to ensure oversupply is absorbed and pricing becomes more balanced. A final decision is expected in the next few days. In April 2020, OPEC and Russia decided to cut crude output by 9.7 million bpd, accounting for about 10% of output. That was to take care of the demand crash. However, with economies opening up from the lockdown and demand for oil likely to come back to normal levels, OPEC and Russia should be in a position to ensure that there is enough storage space available globally to avoid another price crash. In the last one month, the price of crude oil has spiked from a low of $16/bbl to $35/bbl. Apart from the supply cuts by OPEC and Russia, the shale output from the US and Canada was also sharply lower.