One month extension

Oil price rises as Opec and allies extend output cut

Maersk oil field

Prices ticked up on agreement

Oil producers have agreed a further cut in production of nearly 10 million barrels a day through to the end of July.

Opec and its allied nations, including Russia, hope the move will boost energy prices hit by the coronavirus pandemic.

The measure was adopted by the cartel meeting via video conference.It represents some 10% of the world’s overall supply.

Oil ministers shared their alarm at the plunge in prices in April but believe there are signs that the worst is over.

Crude oil prices have been gaining in recent days in anticipation at the cut. International benchmark Brent crude traded on Saturday over $42 a barrel from 20 dollars a barrel in April.

The price fall was initiated by a price war between Saudi Arabia and Russia. The coronavirus brought global travel largely to a halt, depressing demand for oil.

Under a deal reached in April, Opec and allied countries said they would cut 10 million barrels per day until July, then eight million barrels per day through the end of the year, and six million a day for 16 months beginning in 2021.

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