OPEC, Allies agree to extend stringent output curbs

Oil producers under the OPEC+ deal have agreed to extend by one month output cuts to shore up oil prices and would adopt tough measures to keep in line members who flout their production pledges.

The deal has helped lessen the financial pain of members whose economies have taken a hit following months of declining oil prices due to the impact of the coronavirus epidemic.

Members including Nigeria, Iraq and others who have produced above their obligated output levels will be unable to flout rules as Russia and Saudi Arabia agree to monitor compliance.

Every moment, the group say they will meet to assess the evolving balance between supply and demand amind an uncertain economic recovery from the global pandemic.

Delegates at the meeting today agreed to sign off on the new deal. The group will maintain its production cut of 9.7million barrels a day to end of July, instead of easing to 7.7 million after this month as planned. Any member who does not implement 100 percent of its production cuts in May and June will make extra reductions from July to September to compensate for their failings, the group decided.

OPEC+ which will last till April 2022 is contingent on the 23-nation involved in the agreement complying with their pledged cuts, something that has been difficult to enforce since the cooperation started in 2016.

Oil prices posted gains for the sixth week rising to $42.30 a barrel since April as traders anticipate tightened supplies as demand recovers from the coronavirus lockdown Bloomberg reports.