The impact of Opec’s production cuts

On Friday, the Organization of the Petroleum Exporting Countries (Opec) and its non-Opec allies (together called Opec+) decided to cut oil production by another 500,000 barrels per day (b/d).

This is over and above the production cut of 1.2 million b/d (m b/d) announced in December last year. Additionally, several participating countries, mainly Saudi Arabia, will continue their additional voluntary cuts in production, leading to adjustments of about 2.1 m b/d. The latest cuts will be effective for the March quarter (Q1 CY20).

But analysts are not too gung-ho about the impact of these cuts.