OPEC, Allies Agree to Extend Record Production Cut

OPEC and its oil-producing allies agreed on Saturday to extend the group’s historic production cut for an additional month in an ongoing effort to balance the global oil market. The agreement was finalized during the group’s video-conference meeting.
Beginning on May 1, the alliance cut production by 9.7 million barrels per day. The cuts were initially supposed to begin declining on July 1, CNBC reported.
Now, July’s production cut will be 9.6 million bpd after Mexico, which accounts for 100,000 bpd, said it remained committed to the group’s prior agreement.
Nations that have failed to curb output by their allocated amount must enact additional cuts in July, August and September in order to make up for non-compliance in May and June.
Iraq is among the oil-dependent nations that has struggled to maintain reduced output. “Despite the economic and financial circumstances that Iraq is facing, the country remains committed to the agreement,” Assem Jihad, Iraq’s Oil Ministry  spokesperson, said.
Under the prior agreement, the 23-member group began curbing production by 9.7 million bpd on May 1, which was slated to extend through the end of June. The cuts would then begin to taper. 
From July through the end of 2020, 7.7 million bpd would be taken offline, followed by 5.8 million bpd from January 2021 through April 2022.
The cut — the largest in history — came as oil demand fell off a cliff due to the coronavirus pandemic as billions of people around the world stayed home in an effort to slow the spread of Covid-19.
The hit to demand came as producers continued to pump oil, which sent WTI tumbling into negative territory for the first time on record, while Brent fell to a 20-year low. Since then, prices have steadily climbed higher as economies begin to reopen and as producers further rein in output.