Oil storage facility of Saudi Aramco Photo: Xinhua

Organization of the Petroleum Exporting Countries (OPEC) and its partners including Russia and others are expected to further extend production cut until the end of 2020 from the end of March, 2020, according to a research note by Swiss investment bank UBS AG on Friday.

Still, OPEC and its partners would have higher production allowance in the second half of 2020, said UBS in the report.

Crude oil output from OPEC would dip to 29.6 million barrels per day in 2020, down from 30 million barrels per day in the previous year, UBS said.

Seasonally weak demand and vibrant supply growth from non-OPEC oil producing countries would lead to around 600,000-barrels/day of oversupply in the first half of 2020, which would drive Brent crude oil price down to 60 U.S. dollars per barrel in the period, according to UBS.

However, international oil market is expected to be nearly balanced or slightly undersupplied in the second half of 2020 thanks to improving fundamentals, UBS said.

World's oil demand would increase by 1 million barrels per day in 2020 versus 900,000 barrels per day in 2019 with demand growth to be entirely driven by emerging markets, according to the report.

In December 2019, OPEC and its partner agreed to deepen production cut by 500,000 barrels per day for the first quarter of 2020 to 1.7 million barrels per day with Saudi Arabia committing to another 400,000-barrels/day of conditional voluntary production cut for the quarter.

In early July of 2019, OPEC and its partnering countries announced the extension of production cut for nine months starting from the second half of 2019 following the introduction of 1.2-million-barrels/day production cut since January 2019.