OPEC+ members led by Saudi Arabia and Russia agreed on Sunday to extend a voluntary oil production cut of 2.2 million barrels a day for the second quarter of the year, lending further support to the market amid concerns about global growth and rising output outside the group, writes UNN citing Reuters.
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Saudi Arabia, the de facto leader of the Organization of the Petroleum Exporting Countries (OPEC), said it would extend a voluntary production cut of 1 million bpd through the end of June, leaving output at about 9 million bpd.
russia, which leads OPEC allies known collectively as OPEC+, will cut oil production and exports by another 471,000 bpd in the second quarter. Russian Deputy Prime Minister Alexander Novak cited new figures showing that production cuts will account for an increasing share of the measure.
"The Russian side came as a surprise", UBS analyst Giovanni Staunovo said, calling the development largely expected.
"If the Russian cuts are fully realized, additional barrels will be removed from the market. So this is an unexpected move that no one expected, and it could lift prices," he added.