CURRENT AFFAIRS

Detailed explanation-1: -The grouping of the world’s largest oil-producing countries, the Organisation of the Petroleum Exporting Countries (OPEC) and its allies, together known as OPEC+, decided to cut oil production by 2 million barrels per day (bpd) on Wednesday (October 5).

Detailed explanation-2: -OPEC+ to cut oil production by 2 million barrels per day to shore up prices, defying U.S. pressure. OPEC and non-OPEC partners on Wednesday agreed to impose deep output cuts, seeking to spur a recovery in oil prices despite U.S. pressure to pump more.

Detailed explanation-3: -Led by Saudi Arabia and Russia, OPEC+ slashed output by a record 10 million barrels per day in early 2020 when demand plummeted due to the Covid-19 pandemic. The oil cartel has since gradually unwound those record cuts, albeit with several OPEC+ countries struggling to fulfill their quotas.

Detailed explanation-4: -Historically, crude oil prices have seen increases in times when OPEC production targets are reduced.

Detailed explanation-5: -Traders were paying money to get rid of oil. o Shortage of storage space forced OPEC to cut supply. Desired outcome of the supply cut was to increase oil price which has fallen into negatives due to record surplus due to worldwide lockdown.