This Sunday the countries of the OPEC+ alliance agreed today a cut of 9,7 million barrels per day (mbd) to stabilize prices in the oil market, a measure that would allow reversing the fall caused by the economic crisis derived from the COVID-1 pandemic9, as reported infobae
By Miami Diario Newsroom
In a statement from the Kazakh Ministry of Energy it is specified that "at the end of the telematic ministerial meeting of the members of OPEC + and those who are not part of OPEC + an agreement was signed to cut oil production by 9,7 million barrels per day for two months, starting May 1”.
The truth is that the Iranian Oil Ministry stated on its Twitter account that OPEC+ members accepted Mexico's proposal to reduce their production by 100 mbd, during May and June.
For her part, the Mexican Secretary of Energy, Rocío Nahle, indicated on the same social network that the agreement reached by the 23 countries participating in the telematic meeting, the second after last Thursday, was "unanimous" and "will start a reduction in the oil platform of 9,7 mbd starting in May."
However, experts are reluctant to that these cuts serve to raise prices.
Rystad Energy analysts noted that “a cut of 10 million barrels per day in May and June will prevent reaching storage limits and prevent prices from falling into the abyss, but it will not restore the desired market equilibrium.”
As is known, the United States, the world's leading producer, is not part of the OPEC+ alliance but, according to Russian Energy Minister Alexander Novak, "supports the agreement", which could give life to its struggling shale oil industry.
Novak signaled that Washington would be willing to lower production. “We have heard figures of 2.000 to 3.000 million barrels per day”, said the Russian minister.
Along these lines, the Azerbaijani Ministry of Energy pointed out, in turn, that at this tenth meeting of the members of the Organization of Petroleum Exporting Countries (OPEC) and non-OPEC members "It was decided that the United States will reduce its production by another 300.000 barrels per day to compensate" for what Mexico stops cutting.
One thing to consider is that Mexico was initially supposed to reduce its production by 400.000 barrels per day, but refused to undertake a cut of this scope. The United States finally agreed to help Mexico achieve a reduction in its quota in order to achieve a global agreement and stop the fall in prices.
However, The parties were unable to seal the agreement because Mexico abandoned the telematic meeting due to disagreement with the cut levels.
Khaled al Fadhel, Kuwait's Oil Minister, indicated via Twitter that "thanks to the wise instructions, the continuous efforts and the continued conversations”, a “historic agreement” has been reached to cut crude oil production.
It is worth noting that the meeting was made possible after Saudi Arabia and Russia ended the price war they have been waging since the group's last conference., on March 6 in Vienna, Austria, headquarters of OPEC.
It should be noted that the two exporters were surprised by the speed of the spread of the coronavirus, which hit oil demand hard, at a time when there was already a surplus supply.