After four days of negotiations, OPEC+ has approved the biggest ever oil cut by 9.7 million barrels per day. Oil producers will commence oil cuts on May 1, 2020, and gradually relax cuts after June. After June, the 9.7 million barrel cut will be lowered to 7.6 million a day until December and then to 5.6 million through 2021 until April 2022.
Therefore, total global oil supply cuts announced so far could come to around 20 million barrels per day as OPEC and Russia agreed to cut oil production by up to 10 million barrels per day last week Friday. This brings total cuts to about 20% of the global supply.
Oil prices are expected to stabilize in the week as coronavirus has hammered global fuel consumption which is down 30%. Prices have more than halved since the start of the year recording their lowest levels in decades.
READ ALSO: OPEC and Russia Agree to Cut Oil Production by 10M BPD
Saudi Arabia, Russia, and the United States welcomed the OPEC+ proposed cuts saying it will support global oil markets and stabilize global economies.
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