OPEC+ continue oil production cuts with exceptions for Russia, Kazakhstan

Vienna/Moscow, Mar 4 (efe-epa).- OPEC and its allies decided Thursday to maintain the current reduced levels of oil production for April, while allowing Russia and Kazakhstan to boost output moderately.

Ministers from the 13 Organization of the Petroleum Exporting Countries member-states and 10 allied nations, known collectively as OPEC+, conferred by video-conference.

“The Ministers approved a continuation of the production levels of March for the month of April, with the exception of Russia and Kazakhstan, which will be allowed to increase production by 130,000 and 20,000 barrels per day, respectively, due to continued seasonal consumption patterns,” OPEC said in a statement.

Saudi Arabia, the world’s No. 2 oil producer behind the United States (which is not part of OPEC+), said that it was extending through the end of April the voluntary additional 1 million barrels per day (bpd) output cut it initiated at the start of February.

The 23 OPEC+ nations, which together account for approximately 60 percent of global oil production, agreed in April 2020 to reduce output by 9.7 million bpd to put a floor under prices amid the historic drop in fuel consumption caused by the Covid-19 pandemic.

Subsequent adjustments brought the amount of production withheld from the market to 6.85 million bpd.

The ministers hailed the efforts of participating countries for achieving 103 percent “overall conformity” with the original commitments.

From the April 2020 meeting until the end of January 2021, OPEC+ cut production by 2.3 billion bpd, “accelerating the oil market rebalancing,” the statement said, adding that “in December, stocks in OECD (Organization for Economic Cooperation and Development) countries had fallen for the fifth consecutive month.”

The statement also highlighted the “recent improvement in the market sentiment” due to Covid-19 vaccine programs and “additional stimulus packages in key economies.”

Traders had expected OPEC+ to increase production by at least 500,000 bpd, so the decision to maintain output at lower levels sent oil prices sharply higher.

Brent crude was 5.47 percent higher in futures trading in London shortly after the outcome of the OPEC+ conference was announced.

The next meeting is scheduled for April 1. EFE wr/psh/lap/dr