By Adedapo Adesanya
Azerbaijan has promised to reduce its oil production by about 2.7 million tons within the agreement signed by members of the Organisation of the Petroleum Exporting Countries (OPEC) and their allies known as OPEC+.
The country’s Finance Minister, Mr Samir Sharifov, said on Monday that as a result of lower demand due to the coronavirus pandemic, the world faced a sharp decline in oil prices in April, amounting to $12-20 per barrel.
However, he noted that the new OPEC+ agreement allowed a slight stabilization of the oil prices over the last couple of months.
It should be noted that in April 2020, OPEC and non-OPEC countries entered into an agreement on the reduction of daily oil production by 9.7 million barrels in May-June with Azerbaijan expected to cut 164,000 barrels daily.
Azerbaijan is fulfilling its obligations under OPEC+ agreement. Thus, the average daily oil production in May amounted to 650,000 barrels, in June to 553,800 barrels and in July to 650,100 barrels.
Meanwhile, the average price of crudes of OPEC members rose to $45.01 per barrel on Monday.
In the latest calculations released by the OPEC secretariat, the OPEC basket grew by 14 cents or 0.31 per cent from the previous session’s $44.87.
The boost was spurred by supportive data from China which showed that China’s factory deflation eased in July, driven by a rise in global oil prices and as industrial activity climbed back towards pre-coronavirus levels, adding to signs of recovery in the world’s second-largest economy.
According to the data, the producer price index fell 2.4 per cent year-on-year in July, the country’s National Bureau of Statistics said in a statement, compared with a 3 per cent drop in June.
The basket of 13 crudes also banked on support from news that discussions related to coronavirus economic relief in the United States resumed after talks broke down last week. This means if American citizens receive the stimulus, they will be able to buy and by extension rouse the economy.
The OPEC Reference Basket of Crudes (ORB) is made up of the following: Saharan Blend (Algeria), Girassol (Angola), Djeno (Congo), Zafiro (Equatorial Guinea), Rabi Light (Gabon), Iran Heavy (Islamic Republic of Iran), Basra Light (Iraq), Kuwait Export (Kuwait), Es Sider (Libya), Bonny Light (Nigeria), Arab Light (Saudi Arabia), Murban (UAE) and Merey (Venezuela).
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