The United States Energy Information administration says the production cuts by the Organisation of the Petroleum Exporting Countries and its allies will result in a relatively balanced market next year
The EIA noted that members of OPEC and 10 non-OPEC partner countries, collectively known as OPEC+, agreed on April 15 to reduce crude oil production in response to rapidly increasing global oil inventories in the first quarter of 2020.
The agency noted that starting in May, the OPEC+ agreement called for a decrease in crude oil output by an initial 9.7 million barrels per day that gradually tapers through April 2022, the end of the current agreement period.
The EIA said its monthly data showed that OPEC total crude oil production decreased by six million bpd from April to May, which was the largest monthly production decline since 1993.
It said compared with January total petroleum liquids production, partner countries’ output fell by an estimated 5.9 million bpd in May, 7.9 million bpd in June, 7.1 million bpd in July, and 5.6 million bpd in August.