Translated material
OPEC extended the freezing of oil production for nine months
OPEC agreed to extend the agreement on the freezing of oil production for another nine months. It is reported by Reuters with reference to one of the summit delegates. This information was confirmed by Bloomberg sources.
On May 24, a committee made a similar recommendation following the implementation of agreements by countries included in OPEC and oil producing states outside the cartel. The monitoring committee consists of Algeria, Kuwait and Venezuela (OPEC participants), as well as Russia and Oman.
Having examined several scenarios of the development of events, the committee recommended extending the agreement for three quarters starting from July 1, 2017. Thus, restrictions on the level of oil production will be valid until the end of March 2018.
In mid -May, Russia and Saudi Arabia expressed their readiness to extend the agreement for nine months, and later other oil -producing countries agreed with them. As the head of the Ministry of Energy Alexander Novak said in early May, if the restrictions on oil production will last, this will speed up the return of the market to a healthy state. At the same time, Vygon Consulting rated the losses of Russian oil companies in this case at 70 billion rubles for 2017.
In early May of this year, world oil prices decreased to the levels of November 2016: Brent barrels have become less than $ 47, and WTI quotes dropped below $ 45 per barrel. On the afternoon of May 25, after the news on the decision of OPEC, oil quotes dropped by 1.3–1.5%: Brent sold about $ 53, and WTI - about $ 50.5 per barrel. In the morning on the same day, the Brent barrel cost $ 54.6, and the WTI barrel - almost $ 52.
At the end of November 2016, OPEC participants for the first time since 2008 agreed to reduce the volume of oil production - by 1.2 million barrels per day to 32.5 million barrels. Not submitting to the organization of the country on December 10, they signed a similar agreement providing for the total reduction of oil production by almost 600 thousand barrels per day. As part of the agreement, Russia decided to gradually reduce oil production by 300 thousand barrels per day.