By throttling their oil production, the major producing countries wanted to put a stop to the fall in prices in the Corona crisis. Now Opec is negotiating a possible extension.
Vienna (dpa) - The oil cartel Opec started talks on Saturday about a possible extension of their current funding cuts.
The major oil producing countries want to stop the price decline in the Corona crisis. After the internal coordination, the oil cartel wants to speak to its cooperation partners, the so-called Opec +.
The video talks between the cartel and the group led by Russia are primarily concerned with extending an agreement to cut oil production that was agreed two months ago. The Russian side said in advance that it would be a "long and difficult night".
"These adjustments have brought the much needed relief to the market and we have seen a cautious recovery," said Algerian Energy Minister and Opec Conference chairman Mohamed Arkab at the start of the talks on Saturday. "The outlook for both supply and demand has improved over the past few weeks." So far, the countries involved have kept the agreement to a high degree.
The Organization of Oil-producing States (Opec) and the other countries agreed in April to cut oil production by 9.7 million barrels (159 liters each) a day for the months of May and June. Opec expects a sharp drop in oil consumption due to the economic consequences of the corona crisis. Throttling should make prices fall again.
Market observers expect an agreement. However, Opec does not want to push prices up too much. That could put the US competition back into play, which could produce at a price beyond $ 40 a barrel to cover costs.
With a sharp rise in oil prices, Opec would dig its own grave, stressed Commerzbank expert Eugen Weinberg. Countries that have produced more than they should in the past month have promised to meet their commitments in the future, he said, referring to Iraq, Nigeria, Angola and Kazakhstan.
Nigeria confirmed its readiness to comply with the agreement at the start of the talks. Countries that are unable to comply with the agreement during the current two-month period should compensate for this within the next three months, the ministry responsible said.
Ministry of Nigeria