With the slight rebound in demand for oil, OPEC+ has decided to unwind some of its supply cuts which were imposed amid global pressure during the height of the coronavirus pandemic.
Back in May, OPEC and Russia agreed to reduce the global supply of oil as a means of preventing the oil market from completely collapsing amid coronavirus lockdown measures and travel restrictions. Now that oil prices and demand have slightly rebounded, especially from the disastrous April negative futures, OPEC has once again engaged in talks with Russia in order to begin the historic unwind of the coronavirus supply cuts.
Both OPEC and Russia are expected to come to a deal, and begin easing production cuts from 9.7 million barrels per day to only 7.7 million barrels per day starting in August. However, the increase in production may only be incremental, given that countries such as Nigeria and Iraq may not be able to produce as many barrels as otherwise anticipated.
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