Nigeria and other members of the Organisation of Petroleum Exporting Countries agreed on Thursday to cut oil production by additional 1.5 million barrels per day in the second quarter of 2020 to prop up prices.
The agreement, which was reached at the 178th (Extraordinary) Meeting of the Conference of OPEC in Vienna, Austria, needs the backing of its 10 allies led by Russia.
OPEC also recommended that the existing cuts of 2.1 million bpd, which would expire this month, should be kept in place until the end of 2020. OPEC and its allies will meet on Friday (today) to discuss the recommendations.
“Something has to be done; that’s why we’re here,” The Minister of State for Petroleum Resources, Chief Timipre Sylva, told reporters just before the meeting started, according to S&P Global Platts.
The conference said in a statement that the COVID-19 outbreak has had a major adverse impact on global economic and oil demand forecasts in 2020, particularly for the first and second quarters.
It said, “In view of the current fundamentals and the consensus on market perspectives, the conference decided to recommend to the 8th OPEC and non-OPEC Ministerial Meeting to extend the adjustment levels agreed at the 177th meeting of the conference and the 7th OPEC and non-OPEC Ministerial Meeting for the remainder of the year.
“It also agreed to recommend to the 8th OPEC and non-OPEC Ministerial Meeting a further adjustment of 1.5 million bpd until June 30, 2020 to be applied pro-rata between OPEC (1.0 mbpd) and non-OPEC producing countries (0.5 mbpd) participating in the Declaration of Cooperation.”