On Sunday, OPEC and non-OPEC nations agreed on a new deal to slash oil production after weeks of instability on oil markets prompted by the coronavirus pandemic and internal disagreements in the organisation.
Global oil supply will plunge by a record 12 million barrels per day next month following the conclusion of the OPEC+ deal to cut oil production, according to a forecast by the International Energy Agency. Oil demand, in turn, is expected to sink by a record 9.3 million bpd year-on-year in 2020.
The IEA added that the demand for oil is likely to gradually recover in the second half of this year.
Addressing the OPEC+deal to slash oil production, struck on Sunday, the agency said that this effort will not stabilise the market momentarily but will improve the situation conrcerning excessive supplies.
The organisation went on to say that China, India, South Korea, and the United States have either offered the oil industry storage for “unwanted barrels” or considered boosting their strategic stocks.
OPEC Deal
In March, Saudi Arabia triggered an oil price war flooding the market with cheap oil after OPEC+ had failed to reach an agreement on additional cuts.
The failed deal as well as the ongoing coronavirus epidemic sent markets reeling with oil prices sinking to record lows.
On Sunday, OPEC and non-OPEC countries agreed on a new deal to cut oil production. According to the pact, after 1 May, oil production will be slashed by 7.7 million barrels a day for six months, until 31 December. Starting in January next year, output will be reduced by 5.8 million barrels per day until April 2022.
Sourse: sputniknews.com
