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As per Reuters, Saudi Arabia’s Energy Minister said on Monday that effective global oil supply cuts would amount to around 19.5 million barrels per day (bpd), taking into account the reduction pact agreed by OPEC+, pledges by other G20 nations and oil purchases into reserves.

Key quotes

OPEC+ said it had agreed to reduce output by 9.7 million bpd for May and June, after four days of talks and following pressure from U.S. President Donald Trump to arrest the oil price decline.

Prince Abdulaziz bin Salman told reporters via a conference call that G20 nations outside the OPEC+ alliance had pledged to cut about 3.7 million bpd of oil supply, while oil purchases into reserves (SPRs) were seen at 200 million barrels over the next couple of months, according to the IEA.

Prince Abdulaziz also said the kingdom could cut oil output below its current quota of 8.5 million bpd if there was a need by the market over the coming months and if any reductions were done collectively with other producers on a pro-rata basis.

OPEC+ meets next in June via teleconference to decide on output policy.

Market implications

Due to the closing hours of the US settlement, oil prices fail to provide a much reaction to the news. However, it did bounce from $22.20 at the last minutes.