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Oil pumping jacks, also known as "nodding donkeys", are reflected in a puddle as they operate in an oilfield near Almetyevsk, Russia, on Sunday, Aug. 16, 2020.Andrey Rudakov | Bloomberg via Getty Images

LONDON — A group of some of the world's most powerful oil-producing nations on Thursday will meet to review production policy, amid a faltering recovery from the pandemic-driven rout and a bleak outlook for energy demand.

OPEC and non-OPEC allies, sometimes referred to as OPEC+, will convene for an online meeting to review the market and discuss compliance with deep production cuts.

The energy alliance agreed in July to cut output by 7.7 million barrels per day from August through to December, in an effort to prop up oil prices by limiting supply. Iraq and others also pledged to pump below their quotas in September to offset overproduction earlier in the year.

Analysts do not anticipate OPEC+ to announce further output cuts on Thursday, though the issue of compliance is likely to resurface amid signs some exporters may have reneged on their commitments.

OPEC kingpin Saudi Arabia and non-OPEC leader Russia, the two biggest producers in the alliance, have both pushed for full conformity in recent months.

Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman has previously used OPEC meetings to publicly press recalcitrant members to stick to the pledged output cuts.

International benchmark Brent crude traded at $41.92 a barrel on Thursday morning, down over 0.7%, while U.S. West Texas Intermediate crude stood at $39.83, more than 0.85% lower.

Oil prices have dropped more than 35% since the start of the year.

"I do not believe we should expect any material change of course out of the OPEC meeting this week when they review market fundamentals, in part because compliance with previously agreed production cuts has been high," Tim Bray, senior portfolio manager at GuideStone Capital Management, told CNBC via email.

"It might set the stage for action at future meetings, however," Bray said.

Demand outlook

The meeting comes shortly after OPEC and the IEA, two prominent forecasters, trimmed their 2020 outlook for oil demand.

OPEC warned on Monday that risks would likely "remain elevated and skewed to the downside," while the IEA said on Tuesday that the path ahead would be "treacherous" amid weakening sentiment and an upsurge in the number of coronavirus cases reported worldwide.

VIDEO2:2302:23Oil market sentiment 'seems to be weakening,' IEA's head of oil saysStreet Signs Europe

Separately, U.K.-based energy giant BP said on Monday that demand for oil may have peaked in 2019. The company laid out three scenarios for energy demand over the next 30 years, all of which predicted a decline for oil demand through to 2050.

Two of the scenarios, in which policymakers impose more aggressive measures to significantly reduce carbon emissions, would see oil demand fail to fully recover from the coronavirus crisis.

"It remains to be seen whether the make-or-break year-end period will provide the glutted oil market with a much-needed reprieve," Stephen Brennock, oil analyst at PVM Oil Associates, said in a research note.

"What is certain is that skepticism over the oil rebalancing will endure so long as the world continues to grapple with the Covid crisis," Brennock said.

Compliance quotas

"Saudi Arabia's efforts to secure higher compliance delivered results in August, with Iraq even partially delivering the promised 'catch-up' cuts … and Nigeria moving closer to full compliance," Richard Bronze, co-founder of Energy Aspects, said in a research note.

The United Arab Emirates, traditionally a loyal partner to OPEC kingpin Saudi Arabia, emerged as a major laggard in delivering oil output cuts last month, Reuters reported on Wednesday, citing OPEC+ data. The country has since said it will reduce oil supply in the coming months to compensate for pumping above its agreed limit in August.

Output from Iraq and Nigeria, respectively, was expected to remain low in September, Bronze said, then rise from October. "While OPEC+ will track how fundamentals and prices respond, we do not sense an appetite for deeper cuts," he added.

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News Source: CNBC

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Cuomo continues COVID-19 cuts with $300M slash looming over state courts

Gov. Andrew Cuomo is expected to slash the state court system’s annual budget by 10 percent to help close a $14.5-billion, pandemic-induced deficit, according to an internal memo.

New York’s Unified Court System will see a $300 million cut to its annual budget of $3 billion, forcing the judiciary to “implement a range of painful measures,” according to a letter from Chief Administrative Judge Lawrence Marks.

“At this point, we have been able to avoid employee layoffs, but there is no telling what the coming months may bring. One thing is increasingly apparent — the next fiscal year will be as difficult, if not more difficult, than this year,” he wrote.

The last time the court system endured a major fiscal blow was the 2011-12 budget season, when the agency’s funding was reduced by $170 million.

Marks said in the memo that the cost-saving measures include a “strict hiring freeze, elimination of all non-personal services spending, and deferral of substantial payments owed to the next fiscal year.”

The judiciary will save $55 million by allowing only three out of 49 sitting judges beyond the age of 70 to remain on the bench.

“While losing these judges has a significant impact, it’s a shared sacrifice,” said OCA spokesman Lucian Chalfen. “We’re all in the trenches together.”

The Empire State faces a massive $14.5-billion budget deficit next year alone, and that figure will balloon to $30 billion by 2022.

Additional losses recorded by the MTA and Port Authority elevate that figure to a combined high of $50 billion.

State agencies, local governments and school districts across the state have feared anticipated cuts — some estimated as high as 20 percent — could be made permanent within the coming months without more federal aid.

Cuomo has been loath to support a tax hike on the state’s wealthiest earners — or authorize a New York City-specific, billion-dollar loan sought by Mayor Bill de Blasio.

see also
Gov. Andrew Cuomo needs to start spelling out his spending cuts It’s long past time for Gov. Cuomo to offer up...

“Either Congress passes [a new stimulus package], or Joe Biden wins, or the Senate goes Democratic. In any of those cases, it’s a federal problem,” the third-term Democrat told reporters during a Manhattan briefing Tuesday.

“You can’t close $50 billion without tax increases, millionaire’s tax, billionaire’s tax, wealth tax, cutting expenses dramatically and borrowing. If we did that, you’re looking at a bad spell for New York City and New York State, and I’m not going there … I’m not picking up the check because I don’t assume, or accept, any liability; it’s all Washington. And if Trump wins again and the Senate Republicans win, yes, we have a terrible economic forecast,” he argued.

A spokesman for the state Division of Budget defended the expected cuts anticipated cuts.

“To be clear: The state hasn’t made any permanent spending cuts as we await clarity from Washington on federal support to offset the state’s COVID-19 revenue losses,” DOB spokesman Freeman Klopott told The Post. “Nonetheless, we appreciate the judiciary’s good faith efforts to reduce costs just like every executive agency has been asked to do by freezing hiring, new contracts and pay raises.”

Filed under andrew cuomo ,  budget cuts ,  Coronavirus in NY ,  courts ,  9/29/20

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