(Source: "Shanghai Securities News" 2020-06-08）
Dong Xiucheng
In order to stabilize the crude oil market, OPEC and non-OPEC oil-producing countries (hereinafter referred to as"OPEC+") held a ministerial meeting via video on June 6. All parties agreed to extend the previously reached historic production reduction agreement until the end of July; at the same time, oil-producing countries that had previously failed to fully implement the production reduction plan will carry out additional production cuts from July to September to make up the difference. The industry believes that this sends a positive signal to the crude oil market, and oil prices will receive further support.
Saudi Energy Minister Abdullah- Aziz said at the meeting that although there are still many uncertainties, the collective efforts of oil-producing countries "have achieved positive results." As demand for crude oil from major consuming countries gradually recovers after the epidemic, oil-producing countries need to fulfill their policy commitments within a collective framework so that investors can restore confidence in the global oil market.
Dong Xiucheng, Professor of w88 casino of International Business and Economics, w88 casinoThink,The reason why "OPEC+" decided to extend the production reduction agreement until the end of July is because the pace of their global resumption of work and production was slower than previously expected. In order to stabilize oil prices, they made the decision to further reduce production. As for whether to continue to extend the date of the production reduction agreement, we still need to continue to observe the degree of economic recovery.
Regarding the implementation of the production reduction agreement, Dong Xiucheng believes that although the implementation of the previous production reduction agreement by various countries is not ideal, due to the impact of the epidemic, it is expected that various countries will not implement the agreement 100%, and there will be no breach of contract.
This yearIn mid-April, "OPEC+" reached a historic production reduction agreement: starting from May 1, the first round of production reduction will be 9.7 million barrels per day for two months. From July to the end of the year, the scale of production reduction was reduced to 7.7 million barrels per day; from January 2021 to April 2022, the scale of production reduction was 5.8 million barrels per day.
Since then, Saudi Arabia has stated that it will start fromStarting from June, on the basis of the production reduction share stipulated in the agreement, an additional 1 million barrels of crude oil production per day will be "voluntarily" reduced. Subsequently, the United Arab Emirates, Kuwait and other Middle Eastern countries also announced additional production cuts. Dong Xiucheng believes that the production reduction decision made by "OPEC+" has provided certain support to oil prices. Coupled with the overall easing trend of the epidemic, oil prices are expected to gradually rise.
Since late April, international oil prices have risen from less than US$20 per barrel to around US$40 per barrel, basically recovering the ground lost in March. As of last Friday, the main Brent crude oil futures contract closed at $42.07 per barrel, and the main U.S. light crude oil contract also rose to $38.94 per barrel.
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