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China News Service Client, July 1, According to Reuters Chinese website on the 1st, a survey by Reuters found that due to the additional voluntary production cuts by Saudi Arabia and other Gulf Arab member states, the Organization of Petroleum Exporting Countries (OPEC) in June fell to its lowest level in 20 years, which pushed the implementation rate of the OPEC production cut agreement to more than 100%, although Iraq and Nigeria did not fully fulfill the production cut quota.
reported that the investigation found that the average production of OPEC, composed of 13 member states, was 22.62 million barrels per day in June, 1.92 million barrels per day lower than the revised level in May. The OPEC+ alliance, which OPEC and its allies, agreed in April to implement record production cuts to alleviate a decline in demand caused by the coronavirus crisis. Easing lockdown measures and reduced supply helped oil prices climb above $40 from a 21-year low of under $16 a barrel set in April.
report quoted Tamas Varga of oil broker PVM as saying, "Demand is expected to rebound in the second half of the year. The market generally believes that OPEC+ will live up to expectations and achieve a higher execution rate of production cuts in June and July."
According to reports, OPEC+ agreed to cut production by 9.7 million barrels per day from May 1, accounting for 10% of global production. Among them, OPEC's production cut share was 6.084 million barrels per day, jointly undertaken by 10 member states, and most countries use production in October 2018 as the base of production cuts. The survey also found that in June, the scale of OPEC production cuts was 6.523 million barrels per day, equivalent to a 107% agreement execution rate, and the execution rate in May was revised up to 77%.
report mentioned that investigation records show that, after deducting the impact of changes in member states, production in June will be the lowest level since at least 2000. The country with the largest decline in production is Saudi Arabia, with production of 7.55 million barrels per day in June, an additional 1 million barrels per day based on the OPEC+ production cut agreement, which is Saudi Arabia's lowest output since 2002.
report quoted sources as saying that UAE and Kuwait have also carried out additional voluntary production cuts. Iraq and Nigeria were not implemented in the OPEC+ production cut agreement in May and before, and the two countries increased their production cuts in June, which is another reason for the decline in overall OPEC production. (Source: China News Service)
