The meeting of the Organization of Petroleum Exporting Countries, Russia and other countries (OPEC+) will held today in Vienna, Swiss - Photo by OPEC

JAKARTA (TheInsiderStories) – The meeting of the Organization of Petroleum Exporting Countries, Russia and other countries (OPEC+) will held today in Vienna, Swiss. The meeting its expected have a same direction with OPEC members to cut crude oil supply and will give “fresh air” to the commodity market.

Yesterday, the OPEC members agreed to extend restrictions on 1.2 million barrels of crude oil supply by March 2020. The 14 members will meet again in Dec. 5, giving the cartel several months between the next meeting and the end of the agreement.

But the OPEC decision still needs to be ratified by non-OPEC allies on today’ meeting. Several countries, especially Russia, have given their approval. The idea of this extension was first debated by President Vladimir Putin after met Saudi Arabia’ crown prince at the Group 20 Summit in Osaka, Japan, on Saturday (06/29).

By pushing for an extension until March 2020, Saudi Arabia seeks to avoid hanging out meetings, when the group collects for only a few days – or even hours – before the sidewalk round ends. As for Russia, there are additional incentives to extend restrictions to nine months because its oil companies are struggling to increase production during the winter.

The Joint Ministerial Monitoring Committee (JMMC) took note of oil market developments since it last met in Vienna on December, 2018, that economic bearishness is now increasingly prevalent, with major challenges and mounting uncertainties related to ongoing trade negotiations, monetary policy developments, as well as geopolitical issues.

It was also observed that oil demand growth for 2019 has been revised down since the last meeting to now stand at 1.14 million barrels a day (mb/d), and non-OPEC supply in 2019 is expected to grow at a robust pace of 2.14 mb/d, year-on-year.

The JMCC also observed the potential consequences of these developments on global inventory levels, as well as overall market and industry sentiment. It also recognized the recent record high conformity levels to the voluntary production adjustments by all participating countries in the ‘Declaration of Cooperation’.

The members acknowledged the crucial role played by participating non-OPEC countries in the ‘Declaration of Cooperation’. In this regard, it stressed the significance of the 6th OPEC and non-OPEC Ministerial Meeting that will take place on July, 2.

On Monday, crude oil prices surged West Texas Intermediate (WTI) crude futures rose 1.1 percent at US$59.09 a barrel and Brent crude rose 0.5 percent at $65.07 a barrel. The rise in oil prices was boosted caused the OPEC+ is predicted will extend the production cuts for the next nine-months.

The trade truce between the United States and China and news that Iran breached its nuclear agreement also boosted oil prices.

This morning, the price of WTI oil for August 2019 shipments on the New York Mercantile Exchange was open at the level of $58.72 per barrel, down 0.62 percent from the previous day. While Brent price are expected to be underpinned today after last week settled at $64.74, down $0.93 or -1.44 percent.

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