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Money Insider - Opec + examines extension of the cut in production by up to two months

14:20  01 june  2020
14:20  01 june  2020 Source:   businessinsider.de

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OPEC and Russia are moving closer to a compromise on extending current oil output cuts and are discussing a proposal to roll over supply curbs for one to "It is the proposal now, but it is yet to be finalised," one OPEC + source said of the 1- 2 month extension . "It's for a month or two, not for half

OPEC first suggested extending cuts by six months , but later proposed to prolong them by nine months . Russia offered an unusually long duration of OPEC also faces the dilemma of not pushing oil prices too high because doing so would further spur shale production in the United States, the

Dubai / Moscow, Jun 01 (Reuters) - According to insiders, the oil producers united in Opec + are approaching a compromise on expanding their unprecedented cut in production. A proposal will be discussed, after which the cut will be extended by one to two months, three Opec + insiders said on Monday of the Reuters news agency. This step is intended to stabilize the oil price, which has collapsed due to the economic crisis resulting from the coronavirus pandemic.

In mid-April, the organization of oil-producing countries (Opec) and Russia had agreed to reduce daily production by 9.7 million barrels (159 liters each). The cut represents about ten percent of the world's supply and is the largest ever. It was originally intended to apply in May and June and to be gradually withdrawn within two years until April 2022.

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The Organization of the Petroleum Exporting Countries is curbing its output by about 1. 2 million barrels per day (bpd) from Jan. A growing number of OPEC officials believe it may take longer than six months to reduce stocks. "An extension is needed to balance the market," an OPEC delegate said.

Russia, which this year reduced production significantly with OPEC for the first time, has been Saudi Energy Minister Khalid al-Falih told reporters the Organization of the Petroleum Exporting Countries and non- OPEC allies had agreed to extend the cuts by nine months until the end of 2018, as largely

But instead of easing the funding cut in July, Saudi Arabia is striving to keep it going until the end of the year, insiders had told Reuters last week. For this, however, the approval of Russia must be won, which advocates a gradual easing. An extension of the funding cut by one to two months is now the compromise proposal, said an insider. "But that has not yet been finally clarified." Russian industry circles said it was about a month or two, not half a year. Another Opec + insider said there is support for Russia's proposal to extend the funding cut by a month. "But we don't have a consensus here yet."

In addition to the members of the Opec + export cartel led by Saudi Arabia, the Opec + network also includes other countries such as Russia, which refused at the beginning of March to further cut production volumes due to the coronavirus crisis. This triggered the drop in prices. Opec + is expected to hold an online conference on funding policy on June 4. Algeria, which currently holds the Opec presidency, had proposed bringing forward a conference scheduled for June 9-10.

The drop in oil production in the Opec + countries and the record drop in production from non-members such as the United States and Canada have caused the oil price to rise to around $ 35 a barrel. However, it is still only half as high as at the beginning of the year when the coronavirus pandemic had not yet fully impacted the global economy. (Reporter: Rania El Gamal, Vladimir Soldatkin and Olesya Astakhova Written by Sabine Ehrhardt, edited by Kerstin Dörr If you have any questions, please contact the editorial team on 069-7565 1232 or 030-2888 5168)

Royal Dutch Shell, BP & Co .: Will OPEC + further stabilize the oil price this weekend? .
© Provided by The Motley Fool, Inc silhouette of working oil pumps on sunset background Oil stocks like those from Royal Dutch Shell (WKN: A0ER6S), BP (WKN: 850517) and others still have the low Fighting Brent and WTI price levels. After all, at the end of the week, the barrel of Brent was able to leave the $ 40 mark impressively behind. . This creates more space to breathe again.

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