„Despite the economic and financial circumstances facing Iraq, the country maintains the agreement,” OPEC spokesman Assem Jihad, a spokesman for Iraq`s oil ministry, said on Saturday. Without extension, the reductions would be rejuvenated to 7.7 million barrels per day from July 1. OPEC meets on Saturday via video conference. According to the Wall Street Journal, the group is expected to complete a plan to extend current production cuts by July. According to a draft statement, opened by Reuters via videoconference, the group known as OPEC of countries such as Nigeria and Iraq, which exceeded quotas in May and June, is expected to compensate from July to September with further cuts. „Any agreement on the extension of the cuts is conditional on countries that failed to fully comply with their cuts in May compensate for their overproduction,” the source said. Oil ministers from the Organization of petroleum exporting countries and other Russian-led producers met via video conference on Saturday and agreed to continue to cut 9.7 million barrels per day – or about 10 percent of world production in normal times – until July, according to an OPEC press release. The new cuts, despite their historic size, could do little to support oil prices, which fell by about 5%, as OPEC cuts were cut on Thursday. (Markets were closed for the holiday weekend because the agreement was reached.) In recent weeks, as low oil prices put pressure on U.S. producers, companies disagreed on whether they wanted government intervention. But they are united in the frustration of the Saudi-Russian price war. Extremely low prices will lead to reductions in U.S. production – which Russia and Saudi Arabia have long wanted – as oil wells become too expensive to operate.
On Friday, Mexican President Andres Manuel Lopez Obrador said Trump had offered to make further cuts to the United States on his behalf, an unusual offer from the U.S. president, who has long opposed Opec. DUBAI/MOSCOW (Reuters) – OPEC chief Saudi Arabia and non-OPEC Russia have reached a tentative agreement to extend record oil production cuts by a month, while increasing pressure on countries that have not met their cuts, OPEC sources told Reuters news agency. One of the risks is that the recovery of the global economy from the worst pandemic passport will prove more difficult than investors hope. While reduced production and the voluntary closure of oil wells have helped bring demand and supply closer to balance, there are still huge oil reserves in fuel tanks and on vessels that could flood the market. The agreement is massive and represents the largest drop in production in OPEC history. The reduction is more than twice as large as the 4.2 million barrels per day that the oil cartel made through a series of budget cuts during the 2008 financial crisis. However, analysts say this is likely to be overshadowed by the magnitude of the loss of demand in the grip of the pandemic. Two sources also told Reuters that Gulf OPEC producers Saudi Arabia, Kuwait and the United Arab Emirates are not discussing extension of their deeper voluntary oil cuts of 1.180 million bpd beyond June.