Oil markets continue on a losing streak

Desperate to put a floor beneath the crude markets, on June 4, after a ‘contentious’, seven hours meeting of the Opec+ countries, which includes the Organisation of the Petroleum Exporting Countries oil-producing states and its allies, including Russia, Saudi Arabia took a unilateral decision. It announced cutting its oil output further by another one million barrels per day (bpd) in July, extendable even beyond, ‘if needed’, as underlined by the Saudi oil minister Prince Abdulaziz bin Salman. The additional cut would result in Saudi output dropping to 9m bpd in July from around 10m bpd in May. The move was not anticipated, especially once fellow Opec+ members were not interested in further cutting output. But Saudi Arabia was insistent. A ‘somewhat’ compromise was made. While Saudi Arabia announced the voluntary cut on their part, the rest of the OPEC+ oil producers also agreed to extend their current cuts through the end of 2024. Russia also announced extending its voluntary oil production cut of 500,000 barrels per day until the end of December 2024.