OPEC+ Technical Committee commits to production cuts by 159%

OPEC+ Technical Committee commits to production cuts by 159%

OPEC’s technical committee and non-OPEC oil producers said on Tuesday that its compliance with production cuts- at July’s rates- is 159%, higher than expected under a supply-cut deal.

A source from the Technical Committee confirmed that the rate of commitment to productions cut amounted to 159% in July, while producers from outside the organization implemented reductions by 166%, as Reuters quoted its Russian counterpart, TASS.

Saudi crude oil exports fell in June from a month earlier, while Saudi Arabia keeps producing less than 10 million bpd to help clear a global supply glut and boost oil prices, according to Reuters.

The kingdom of Saudi Arabia, the world’s largest crude exporter, exported 6.721 million bpd in June, down from 6.942 million bpd in May, according to the Joint Organizations Data Initiative Oil (JODI-Oil), and pumped 9.782 million bpd in June, up from 9.670 million bpd in May.

The Agency quoted a Saudi oil official, earlier this month, that the Kingdom of Saudi Arabia intends to keep oil exports less than seven million bpd in August and September despite strong customer demand, to restore balance to the market.

  • July rates are higher than expected according to the supply-cut deal.

In July, OPEC and Russia-led allies agreed to extend oil production cuts until March 2020 to support crude prices as the global economy weakens and US output rises, according to monthly export figures provided by Saudi Arabia and other OPEC members for the JODI-Oil Initiative.

Oil prices rose on Tuesday on optimism about easing trade tensions between the United States and China and hopes that major economies will adopt stimulus measures to ward off a possible economic slowdown that could hurt oil demand.

Brent crude rose eight cents to $59.82 a barrel, and US crude rose nine cents to $56.30 a barrel, while the United States said that it would extend a deadline to allow Huawei Technologies to buy components from US companies.

The move, according to observers, signals a slight easing of the conflict between the world’s two largest economies. Also, crude prices have also supported the upward trend of equities around the world with growing expectations that global economies will move to address slowing growth.

A Reuters poll of seven analysts found that US crude inventories were expected to fall by 1.9 million barrels in the week ended on Aug. 19, while the American Petroleum Institute would release inventories data later.