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OPEC and Russia May Ease Oil Production Cuts

  • July 12, 2020

Total demand for gasoline in the United States rose in early July, a big month for driving, the agency said, citing data from the research firm Kayrros, but it fell in Texas, Arizona and Florida, which have seen recent surges in reported cases of infection.

“We could be in for a second dose of falling demand,” said Bill Farren-Price, a director at RS Energy Group, a market research firm.

Oil prices have been on a wild ride in the last few months. They plummeted in April into negative territory, despite a deal days earlier by OPEC and the other oil-producing nations for deep cuts in their May and June production, as demand collapsed and the world ran out of places to put all the oil the industry was pumping out. But a month later, as the global economy started to show signs of life and the production cuts by OPEC and producers in the United States began to take effect, oil prices climbed back above $30 a barrel.

In early June, with road traffic, air travel and other activity still depressed, the group, known as OPEC Plus, decided to extend the 9.7 million barrel-a-day cuts through July. The Saudis also reduced production “voluntarily” by another one million barrels a day in June to the lowest levels in three decades.

Unless there is a change in thinking, the production cuts will ease to 7.7 million barrels a day — still a large amount — in August, as agreed in April.

Article source: https://www.nytimes.com/2020/07/12/business/economy/opec-russia-oil-production-coronavirus.html

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