Saudi Arabia poised to reverse extra production cuts as Opec+ meets | Financial Times:
Saudi Arabia is set to unwind the extra production cuts it pledged last month, increasingly confident that the grand bargain agreed by oil producers in April to reduce supply has restored order to a market thrown into disarray by the Covid-19 crisis.
As part of the deal two months ago, the Opec+ group that includes Saudi Arabia and Russia agreed its biggest-ever production curbs of 9.7m barrels a day. The deal ended a price war between the countries and sought to offset a collapse in demand triggered by coronavirus. This month, Saudi Arabia went even further by making additional cuts of 1m b/d to placate US president Donald Trump, as America’s domestic shale industry reeled from the price plunge.
Now, with Brent crude having rebounded from 18-year lows of below $20 a barrel in April to about $40, Saudi Arabia is poised to bring that 1m b/d of production back, according to four people briefed on the kingdom’s thinking.
Yet given the uncertainty still hanging over the market, the Opec+ group is expected to agree an extension of its core production curbs for at least one month beyond July, when producers were initially due to start tapering the two-year deal.
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