OPEC & non-OPEC members have agreed to cut production by 500,000 barrels a day starting in January 2020 to help boost oil prices amid concerns of an economic slowdown.
The oil producing cartel agreed to cut output for the first quarter of 2020 but did not commit to any further action beyond March.
The combined cuts amount to 1.7 million bpd, or 1.7% of global production. Several participating countries, mainly Saudi Arabia, will continue their additional voluntary contributions. Russia will make an additional cut of 70,000 b/d beyond its current agreed cut of 300,000 b/d.
Ed Crooks, vice-chair, Americas at Wood Mackenzie says that the action shows how the OPEC+ group is taking a flexible approach to managing the market.
Ann-Louise Hittle, vice president macro oils, Wood Mackenzie, adds: 'The group is taking a highly proactive approach to managing the market and will not commit to restrain beyond March 2020, when both a joint ministerial meeting and an extraordinary meeting will be held in the first week of the month.
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