Oil output fell 9% in June but was still above OPEC+ quota

Daniel Fowler
July 13, 2020

In April, OPEC+, a group of 23 oil-producing countries that includes Russian Federation, agreed to reduce output for May and June by about 10 percent of global supply.

Now Saudi Arabia and most individuals in the coalition help a loosening of the curbs, the delegates mentioned. Below a Saudi proposal, the so-identified as OPEC As well as coalition would unwind its present curbs by 2 million barrels a working day to 7.7 million barrels a day, the delegates mentioned.

The agency's outlook on oil has typically been dour over the past few years, putting it at odds with the Saudi-dominated OPEC- or Organization of the Petroleum Exporting Countries - whose members are determined to keep crude prices supported under any condition.

The major benchmarks, Brent and West Texas Intermediate, have remained largely stable over the last couple of weeks, trading in the $40 a barrel range.

For the week, WTI saw a 0.3% weekly fall, while Brent's Friday gain saw a weekly rise of 1%.

The weekly survey of rigs actively-drilling for oil in the United States fell by four to 181, indicating that crude production was still somewhat under control despite recent trends indicating higher output.

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On Friday, both USA and UK crude futures scheduled to be expired on July 20 surged as much as 2 per cent after the Paris-based International Energy Agency (IEA) had boosted up its 2020 demand forecast for crude oil, nonetheless, a record spike in pandemic cases in the United States had been curbing out demand outlook, eventually weighing on the crude oil futures' prices despite a robust turnaround in industrial activities of the bloc and China.

Overall demand for 2020 will be about 92.1 million bpd, with the pace of decline having slowed to 5.1 million bpd in the second half, the agency's monthly oil market report for July showed.

More than 60,500 new COVID-19 cases were reported in the United States on Thursday, setting a daily record. A 9.1% contraction in GDP was expected this year in the region, which would be the "largest in a century", said a video and briefing report by the United Nations chief.

OPEC and its allies, including Russian Federation, rolled over their 9.6 million b/d in collective production cuts through July to help bolster the market as demand emerges from the depths of COVID-19.

But oil refining activity in 2020 is set to fall by more than the IEA anticipated last month and to grow less in 2021, it said.

A strong stock market also boosted oil prices.

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