OPEC Agrees To Cautiously Increase Crude Oil Production

The Organization of the Petroleum Exporting Countries (OPEC) agreed on Thursday to restore the production of over 2 million barrels per day from May to July, as part of a strategy to recover the industry amid the COVID-199 pandemic.

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The OPEC had reduced the number of barrels per day last year, attempting to control prices. On Thursday, the fifth ministerial  meeting of the OPEC - NON-OPEC group took place virtually as the organization has urged members to have "a cautious and careful approach to current oil market conditions as uncertainties remain going forward."

According to the latest report by Associated Press, "crude oil traded 3.6% higher at $61.28 per barrel in trading on the New York Mercantile Exchange while Brent crude rose 3.1% per barrel to $64.66." OPEC  members highlight that demand is still uncertain; hence dramatically raising production can be detrimental to pricing.

In this sense, Saudi Arabia’s Energy Minister Abdulaziz bin Salman warned that "until the evidence of recovery is undeniable, we should retain this cautious stance ... the waves are still tall, and the seas remain rough."