OPEC + … Agreement for a reduction of 10 million barrels/day including 200,000 barrels for Algeria

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The Organization of Petroleum Exporting Countries (OPEC) and its allies agreed, at the end of the extraordinary meeting held from Thursday to Friday by videoconference, to reduce production by 10 million barrels per day (mbd), including 200,000 barrels for Algeria during the months of May and June in order to stabilize oil prices impacted by the coronavirus crisis, announced Energy Minister Mohamed Arkab.

The Organization of Petroleum Exporting Countries (OPEC) and its allies agreed, at the end of the extraordinary meeting held from Thursday to Friday by videoconference, to reduce production by 10 million barrels per day (mbd), including 200,000 barrels for Algeria during the months of May and June in order to stabilize oil prices impacted by the coronavirus crisis, announced Energy Minister Mohamed Arkab.

In a statement to the APS at the end of the 9th ministerial meeting held from Thursday to Friday, Mr. Arkab affirmed that OPEC and non-OPEC member countries have decided to reduce by 10 million (mbd) during the next two months (May and June) in order to stabilize oil prices impacted by the coronavirus pandemic.

The OPEC + countries also decided on a second agreement. This relates to a drop in oil production of around 8 million (mbpd) during the second half of 2020, the Minister of Energy added.

A third agreement has also been signed by the countries of OPEC + concerning a reduction in oil production of around 6 million (mbpd) from January 2021 to April 2022, Mr Arkab added.

Welcoming these « important » decisions taken during this ministerial meeting, he estimated that these three agreements will make it possible to absorb the surplus oil supply currently available on the market and to stop the fall in crude oil prices.

The three agreements should also make it possible, he stressed, to reduce the surplus quantities in world oil stocks.

As regards the quota for the reduction of Algerian production, it will be around 200,000 barrels per day (bpd) during the two months of May and June, before reaching 145,000 (bpd) during the second half of the year 2020, explained the Minister of Energy.

« These reductions are necessary and indispensable to help the stability of the oil market, » he said, pointing out that Saudi Arabia and Russia will each reduce a quantity of 2.5 million barrels per day (a total of 5 million barrels per day).

With the exception of Mexico for which the quantity of reduction of its production has not yet been fixed, all the other member countries of the OPEC+ have initialed these three reduction agreements, the Minister of Energy pointed out.

In addition, Mr. Arkab stated that the OPEC+ countries have agreed to convince the other world oil producers to adhere to these agreements during the virtual conference of the G20 Energy Ministers, scheduled for Friday.

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