Oil producing countries have discussed further reducing their output limit in 2020, with Saudi Energy Minister Abdulaziz bin Salman stressing that success depends on everyone sticking to the deal.
The 14-member Organisation of the Petroleum Exporting Countries (OPEC) and 10 additional countries led by Russia met at OPEC’s Vienna headquarters to discuss reducing their production limit by a further 500,000 barrels per day (bpd).
This cut, which corresponds to 0.5 per cent of global oil production, would add to the 1.2 million bpd that the group already took out of the market in 2019 to bolster prices.
Bin Salman said in his opening statement that the group should send a convincing signal that they are committed to the deal.
“The group must send a signal that what we have committed to in the past and what we will be committing ourselves to for the future will be promptly adhered to and attended to.
“Have faith and have mercy on us,’’ he said.
However, markets and analysts were unimpressed with the reduction plan.
Commerzbank analyst Carsten Fritsch wrote in Frankfurt “such decisions actually change very little.’’
He pointed out that the 24 countries have been pumping less oil than they are allowed under their present limits, meaning that the proposed new cut will not reduce actual oil supply.
Benchmark prices lacked direction without a final announcement from Vienna, with European Brent oil inching up to 63.24 dollars per barrel, while West Texas Intermediate slipped slightly to 58.15 dollars.