The Organization of the Petroleum Exporting Countries (OPEC) is planning to further cut oil supply in 2020 to support crude prices and prevent a worldwide glut.
OPEC member countries meet on Thursday in Vienna, Austria followed by a meeting with Russia and others, a group known as OPEC+, on Friday. OPEC+ has cut supply since 2017 to counter booming output from the United States, which has become the world’s biggest oil producer.
Next year, rising production in the U.S. and other non-OPEC countries such as Brazil and Norway threaten to add to the worldwide glut. OPEC’s actions in the past have angered U.S. President Donald Trump, who has repeatedly demanded OPEC’s de facto leader, Saudi Arabia, bring oil prices down if it wants Washington to provide Riyadh with military support.
Multiple news outlets are reporting that OPEC will discuss increasing current cuts of 1.2 million barrels per day by more than 400,000 additional barrels. Saudi Arabia is reported to be supporting cuts of 1.6 million barrels per day, or 1.6% of global demand.
The current cuts expire in March 2020 and OPEC sources and delegates have said a new deal reached this week could be extended to June or until the very end of 2020. OPEC’s actions have supported oil prices at around $50-$75 U.S. per barrel over the past year.