Gilgit-Baltistan part of J&K: Resolution in British Parliament

Moscow, Jun 7: OPEC, Russia and allies agreed on Saturday to extend record oil production cuts until the end of July, prolonging a deal that has helped crude prices double in the past two months by withdrawing almost 10% of global supplies from the market.

The group, known as OPEC+, also demanded countries such as Nigeria and Iraq, which exceeded production quotas in May and June, compensate with extra cuts in July to September.

OPEC+ had initially agreed in April that it would cut supply by 9.7 million barrels per day (bpd) during May-June to prop up prices that collapsed due to the coronavirus crisis. Those cuts were due to taper to 7.7 million bpd from July to December.

“Demand is returning as big oil-consuming economies emerge from pandemic lockdown. But we are not out of the woods yet and challenges ahead remain,” Saudi Energy Minister Prince Abdulaziz bin Salman told the video conference of OPEC+ ministers.

Benchmark Brent crude climbed to a three-month high on Friday above $42 a barrel, after diving below $20 in April. Prices still remain a third lower than at the end of 2019.

“Prices can be expected to be strong from Monday, keeping their $40 plus levels,” said Bjornar Tonhaugen from Rystad Energy.

Saudi Arabia, OPEC’s de facto leader, and Russia have to perform a balancing act of pushing up oil prices to meet their budget needs while not driving them much above $50 a barrel to avoid encouraging a resurgence of rival U.S. shale production.

It was not immediately clear whether Saudi Arabia, the United Arab Emirates and Kuwait would extend beyond June their additional, voluntary cuts of 1.18 million bpd, which are not part of the deal.

BULGING INVENTORIES

The April deal was agreed under pressure from U.S. President Donald Trump, who wants to avoid U.S. oil industry bankruptcies.

Trump, who previously threatened to pull U.S. troops out of Saudi Arabia if Riyadh did not act, spoke to the Russian and Saudi leaders before Saturday’s talks, saying he was happy with the price recovery.

While oil prices have partially recovered, they are still well below the costs of most U.S. shale producers. Shutdowns, layoffs and cost cutting continue across the United States.

“I applaud OPEC-plus for reaching an important agreement today which comes at a pivotal time as oil demand continues to recover and economies reopen around the world,” U.S. Energy Secretary Dan Brouillette wrote on Twitter after the extension.

As global lockdowns ease, oil demand is expected to exceed supply sometime in July but OPEC has yet to clear 1 billion barrels of excess oil inventories accumulated since March.

Rystad’s Tonhaugen said Saturday’s decisions would help OPEC reduce inventories at a rate of 3 million to 4 million bpd in July-August. “The quicker stocks fall, the higher prices will get,” he said.

Nigeria’s petroleum ministry said Abuja backed the idea of compensating for its excessive output in May and June.

Iraq, with one of the worst compliance rates in May, agreed to extra cuts although it was not clear how Baghdad would reach agreement with oil majors on curbing Iraqi output.

Iraq produced 520,000 bpd above its quota in May, while overproduction by Nigeria was 120,000 bpd, Angola’s was 130,000 bpd, Kazakhstan’s was 180,000 bpd and Russia’s was 100,000 bpd, OPEC+ data showed.

OPEC+’s joint ministerial monitoring committee, known as the JMMC, will meet monthly until December to review the market, compliance and recommend levels of cuts. JMMC’s next meeting is scheduled for June 18.

OPEC and OPEC+ will hold their next scheduled meetings on Nov. 30-Dec. 1.

Davos, Jan 24: Pakistan Prime Minister Imran Khan claimed that he met with a “brick wall” when he approached Indian Prime Minister Narendra Modi with a peace proposal, soon after assuming office.

In an interview to Foreign Policy magazine on the sidelines of WEF 2020 here, Khan also said he told Modi that Pakistan will act firmly if it was given evidence of any involvement in the Pulwama terror attack, but India instead “bombed” Pakistan.

Tensions have escalated between the two countries, following India withdrawing the special status of Jammu and Kashmir in August 2019. Even since, Khan has been trying to seek global intervention to de-escalate the tensions between the two countries.

On Thursday, India's External Affairs Ministry spokesperson Raveesh Kumar categorically ruled out any third party role on the Kashmir issue, asserting that any issue between the two countries should be resolved bilaterally.

In the interview, Khan said that he is a firm believer that military means are not a solution to ending conflicts. “After assuming office, I immediately reached out to Prime Minister Modi. I was amazed by the reaction I got, which was quite weird.

The subcontinent hosts the greatest number of poor people in the world, and the best way to fight poverty is to have a trading relationship between the two countries rather than spending money on arms. This is what I said to the Indian Prime Minister. But I was met by brick wall,” Khan said.

Khan took charge as Prime Minister in August 2018. Referring to the suicide attack in Pulwama, Khan said he immediately told Modi ,“if you can give us any actionable intelligence (that Pakistanis were involved), we will act on it. But rather than do so, they bombed us.”

Noting that the both countries are not close to conflict right now, Khan said that it is important that the UN and the US act.

When asked about US President Donald Trump’s close relationship with Modi, Khan said the relationship is understandable because India is a huge market. “My concern is not about the US-India relationship. My concern is the direction in which India is going,” Khan said.

Khan also sought to compare the events in India to what happened in Nazi Germany.

“Between 1930 and 1934, Germany went from a liberal democracy to a fascist, totalitarian, racist state. If you look at what is happening in India under the BJP in the last five years, look where it's heading, you'll see the danger. And you're talking about a huge country of 1.3 billion people that is nuclear-armed,” he said.