What is OPEC doing to ensure oil prices do not crash in the current market?

[Simon Mugo]

[Simon Mugo]

The Organization of Petroleum Exporting Countries (OPEC) recently decided to extend the existing oil output cuts for another nine months in a bid to stabilise global crude oil prices with a target of keeping oil prices above $50 a barrel.

Oil experts believe that the latest extension to March 2020 is in response to the lower demand for oil globally as most countries are have witnessed slower economic growth triggered by the uncertainties surrounding global trade led by the US-China trade war.

OPEC, in collaboration with its non-OPEC allies including Russia, agreed to extend the 1.2 million barrels per day production cuts to March 2020 in response to the uncertain global economic outlook.

Marc Bruner, the CEO of Fortem Resources, a natural resource company explained: “the only way to firm and stabilise oil is with cuts to production.”

Omar Al-Ubaydli, a research director at Derasat, a Bahrain think tank said: “OPEC+ realises that the Sino-American trade dispute is a serious threat to the global economy, and therefore to oil demand and oil prices.”