OPEC is encouraged by a rally in oil prices and strong adherence to its latest output cut, its secretary general said, although sources say the group has not ruled out further steps to support the market.
The Organization of the Petroleum Exporting Countries, Russia and other allies, a group known as OPEC+, are cutting supply by a record 9.7 million barrels per day from May 1 to offset a slump in prices and demand caused by the coronavirus outbreak.
Brent prices have more than doubled since hitting a 21-year low below 16 dollars in April. So far in May, OPEC+ has cut oil exports by about 6 million barrels per day, according to two companies that track the flows, suggesting a strong start in complying with the deal.
“The oil markets have responded positively to the historic agreement, as well as its robust implementation by participating countries,” Mohammed Barkindo, OPEC’s secretary general, told Reuters. “All in all there is a gradual but steady convergence of the fundamentals of supply and demand,” he added.
OPEC+ will meet virtually on June 10, when it will have a full month’s data on compliance, to review the agreement.
