VIENNA (Reuters) - OPEC and its Russian-led allies agreed on Tuesday to extend oil production cuts until March 2020 in a bid to boost crude prices as the global economy weakens and US output rises.

The alliance, known as OPEC +, has been cutting oil supplies since 2017 to prevent falling prices as competition with the United States, which overtook Russia and Saudi Arabia to become the world's largest producer of crude, has grown.


OPEC and its allies are preparing to extend oil production cuts to support prices
OPEC and its allies are preparing to extend oil production cuts to support prices
Reuters 02 July 2019, 18:50

Be a First Reviewer
From Ulyssea Astakhova, Sharafuddin and Lex Lawler

VIENNA (Reuters) - OPEC and its Russian-led allies agreed on Tuesday to extend oil production cuts until March 2020 in a bid to boost crude prices as the global economy weakens and US output rises.

The alliance, known as OPEC +, has been cutting oil supplies since 2017 to prevent falling prices as competition with the United States, which overtook Russia and Saudi Arabia to become the world's largest producer of crude, has grown.


Asked by reporters whether an agreement had been reached, Saudi Energy Minister Khalid al-Falih said "yes".

Brent crude has risen more than 25 percent since the start of the year after Washington tightened sanctions on Venezuela and Iran, OPEC members, causing their oil exports to fall.

The agreement comes after OPEC's decision the day before.

Concerns about weak global demand as a result of the US-China trade dispute have become a new challenge for the Organization of the Petroleum Exporting Countries (OPEC), which has 14 members.

The extension of the production deal is likely to anger US President Donald Trump, who has demanded Saudi Arabia, OPEC's biggest producer, to pump more oil supplies and help cut fuel prices if Riyadh wants US military support in its confrontation with Iran.

A jump in oil prices could lead to higher gasoline prices, a central issue for Tramb, who is seeking re-election next year.

Brent fell slightly below $ 65 a barrel.

The extension of the OPEC deal comes after Russian President Vladimir Putin said on Saturday he had agreed with Saudi Arabia to extend the deal and continue to cut output by 1.2 million bpd, equivalent to 1.2 percent of global demand.

A Reuters poll of analysts said oil prices may be under pressure from a slowing global economy, which slows demand as US oil drowns the market.

Al-Falih said on Monday he was more optimistic about the global economy after world leaders gathered at the G20 summit over the weekend.

"The global economy in the second half of the year now looks much better than it did a week ago because of the agreement reached by President Trump and Chinese President Shi and the truce they reached in their trade and the resumption of serious trade negotiations," he said.

The meeting also agreed on Tuesday to a long-term cooperation pact between OPEC and non-OPEC producers.