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OPEC Urges Oil Producers to Heed Vow to Cut Output
Oil prices will remain depressed unless producers make good on last November’s pledge to trim output, the Organization of the Petroleum Exporting Countries warns.
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Oil prices will remain depressed unless producers make good on last November’s pledge to trim output, the Organization of the Petroleum Exporting Countries warns.
OPEC’s 13 members agreed to lower their combined production by 1.2 million barrels per day. The cartel has reached 94% of that goal. But that’s only because OPEC’s largest producer, Saudi Arabia, has slashed its output by 800,000 bpd—nearly two-thirds more than its share, The Wall Street Journal says.
Meanwhile, 11 non-OPEC producers who agreed to pump 558,000 fewer barrels of crude per day are far short of that goal.
Oil prices rose 20% after the cutback was announced. But prices have faded since then to about $50 per barrel. OPEC believes that full compliance with its reduction plan will shrink a global glut of stored petroleum and bring the oil market into balance this summer or autumn.
The cartel will formally decide on May 25 whether to extend the reduction program for another six months.
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