OPEC+ decided to curb existing output cuts from May

OPEC and its allies, the world’s most influential oil producers, decided to curb existing output cuts starting next month.

A further 350,000 barrels per day will be added to production in May, with an extra 350,000 coming on the market in June.

In July, the output will be boosted by 450,000 barrels per day.

The OPEC+ alliance is currently cutting by nearly 7 million barrels per day to prop up prices and lessen oversupply. Saudi Arabia has added 1 million barrels per day to those cuts.

Saudi Arabia announced that it will start curbing its voluntary output cuts in May.

The meeting comes after the Suez Canal reopened to traffic, and the COVID-19 continues to spread worldwide. Furthermore, French President Emmanuel Macron ordered France into its third national lockdown.

COVID-19 crisis resumes clouding the demand outlook. Significantly, analysts foresee this to reaffirm Saudi Arabia’s caution about the global economic revival.

Ahead of the meeting, experts considered the group would keep production levels consistent.

Eurasia Group analysts announced that the last month global oil markets experienced a significant level of volatility and a sell-off. This weighed on Brent crude futures to $62 a barrel from $70 before increasing to about $64 in the last days.

WTI gained 4%, while Brent crude oil increased by 3.8%

Analysts at Eurasia Group reported that the Suez Canal even probably helped oil producers, as it prevented a further decline in prices.

International benchmark Brent crude futures increased by $2.38, which equals 3.8%, and traded at $65.08 per barrel.

Furthermore, U.S. West Texas Intermediate futures increased by over 4% and stood at $61.63. Significantly, both contracts had traded in the red throughout the session.

Moreover, U.S. Energy Secretary Jennifer Granholm announced that she spoke with Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman. The aim was to reaffirm the significance of international cooperation to ensure affordable and reliable energy sources for consumers.

It was the first call to Riyadh from a U.S. official ahead of an OPEC meeting since Joe Biden took office.

OPEC+ agreed to cut oil production by a record of 9.7 million barrels per day in 2020. However, they started reducing cuts to 7.7 million and 7.2 million from January.

Saudi Arabia has taken on cuts of 1 million from the beginning of February through March.