Last month of the spring became a turning period for the countries of the oil cartel. According to analysts’ estimates, oil extraction dropped to the 18-year low as Saudi Arabia and other oil-producing countries had fulfilled their commitments to cut output.
Experts noticed that the 13 OPEC members had pumped 24.77 million barrels per day last month. Thus, May turned out to be a fruitful month for the petroleum exporting countries as they managed to reduce oil supply by 5 million barrels per day compared to April.
The only fly in the ointment was the non-compliance with the current agreement. Experts point out that not all OPEC members were able to meet oil supply commitments and cut production to the agreed levels.
On May 1, 2020, OPEC and other independent oil exporters reached a deal to trim output by a record 9.7 million barrels per day. Analysts reveal that oil extraction has sunk to levels not seen since 2002. According to preliminary estimates, the terms of the cartel’s current agreement were fulfilled only by 74%. Saudi Arabia decreased oil production considerably compared to other OPEC member states. In April 2020, Saudi Arabia’s overall output reached 11.7 million barrels per day. South Africa and Kuwait also recorded a significant decline in petroleum extraction last month, while Iraq and Nigeria failed to comply with their obligations.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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