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On Thursday, Algerian Energy Minister Mohamed Arkab called on members of the OPEC+ coalition to abide by the agreement to cut oil production from Friday.
Arkab, whose country holds the Organisation of Petroleum Exporting Countries’ (OPEC) rotating presidency, announced: “It is necessary for all the concerned countries to fully comply with the agreement and to cut production entirely.”
The Algerian minister added that: “The coronavirus crisis had a severe impact on the oil market, as it led to a significant decline in prices and increased inventory.”
He indicated that OPEC is optimistic about the future of the oil market, which will witness an increase in demand during the coming period, due to the resumption of economic activities worldwide and the decrease in supply due to the production cut agreement.
Arkab continued: “This will stabilise the oil market gradually, and lead, consequently, to rising prices.”
He pointed out that OPEC will continue to follow the development of the market and its prospects.
Arkab stressed the organisation’s readiness to take the measures it deems necessary in cooperation with members of the OPEC+ coalition, which includes OPEC oil producers and independent suppliers.
On Sunday, Arkab expected oil prices to rise to $40 a barrel by the second half of this year, following the gradual lift of quarantine procedures in several countries, in addition to the anticipated effect of the production cut agreement.
On Friday, the OPEC+ coalition will start implementing an agreement to cut production by 9.7 million barrels per day for two months, followed by another agreement to reduce production cuts to 8 million barrels per day, until the end of 2020.
A third production cut by 6 million barrels per day, i.e. 2 million barrels less than the previous agreement, will come into effect from the beginning of 2021, until April 2022.
On Wednesday, the US Energy Information Administration (EIA) stated that crude oil stocks in the US increased below analysts’ expectations by 10.6 million barrels, and actually increased by 8.99 million barrels in the past week, on 24 April.
