During their long-awaited meeting in Vienna held yesterday, OPEC member states and Russia managed to agree to continue with the cuts in the volume of oil extraction. The Organization of Petroleum Exporting Countries has been taking this stance regarding production since 2017 in an attempt to stabilize the then-oversupplied market and boost oil prices. Russia, though not an OPEC member, willingly agreed to join their agreement, as they also want to benefit from higher prices.
According to the results from the meeting, OPEC+ will keep the limitations on oil extraction until March 2020, which is a significant extension. Moreover, investors were slightly surprised by it, because Russia especially has been showing signs of wanting to bump up production.
There was additional tension after sanctions were imposed by the United States on Iran and Venezuela, which are among the leading members of OPEC in terms of production. With those two states out of the game, other countries were eager to fill in the gaps in supply the sanctions created, which led to internal tension in OPEC. Still, this meeting shows that at least for now these conflicts are resolved and OPEC+ think as one.
Today the Brent crude reached $65, while the WTI brand was near $59 per barrel.
