OPEC throttles output in May

PARIS: Major oil producers sharply cut back output in May, data showed on Wednesday, as part of a concerted effort to prop up prices that have fallen dramatically in the wake of the global coronavirus pandemic.

In the latest monthly report by the Organization of Petroleum Exporting Countries, data showed that the cartel's 13 member states throttled output by 6.2 million barrels per day (bpd) last month.

Back in April, OPEC and key allies such as Russia -- grouped together under the wider OPEC+ banner -- had pledged to cut output by 9.7 million bpd from May 1 until the end of June.

In a further crisis meeting earlier this month, the oil-producing nations subsequently agreed to extend those cuts through July.

OPEC itself does not officially publish exact output figures in its regular monthly bulletins, but instead cites data compiled by so-called secondary sources.

And according to those statistics, OPEC kingpin Saudi Arabia bore the brunt of the cuts, curbing its output by 3.16 million bpd alone. The United Arab Emirates curtailed production by 1.364 million bpd and Kuwait axed 921,000 bpd.

The concerted action was deemed necessary after oil prices plummeted in the face of falling demand as countries around the world imposed strict lockdowns to stop the spread of the new coronavirus.

Both the US benchmark, West Texas Intermediate (WTI), and Europe's Brent North Sea contracts, slumped to historic lows in April, with Brent falling as low as $15 and WTI briefly entering negative territory.

In its latest monthly report, OPEC estimated that 10 non-member states had, for their part, also cut production by 2.95 million bpd in May, bringing the overall volume of cuts to 9.2 million bpd.

The cartel noted the "high level of conformity" to the voluntary production cuts by both its members and allied oil-producing countries, which, in addition to Russia, include Azerbaijan, Kazakhstan, Mexico and Oman.

On Wednesday, Brent crude was selling at just over $40 per barrel.