Oil Price War Ends With Historic OPEC+ Deal to Cut
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Posted On: 04/12/2020 4:40:39 PM
Oil Price War Ends With Historic OPEC+ Deal to Cut Output
The world’s top oil producers pulled off a historic deal to cut global petroleum output by nearly a 10th, putting an end to the devastating price war between Saudi Arabia and Russia.
After a week-long marathon of bilateral calls and four days of video conferences with government ministers from around the world -- including the OPEC+ alliance and the Group of 20 nations -- an agreement finally emerged to tackle the impact of the global pandemic on demand.
The talks almost fell apart because of resistance from Mexico, but came back from the brink after a weekend of urgent diplomacy, including the personal intervention of President Donald Trump, who helped broker the solution.
“Unprecedented measures for unprecedented times,”said Ed Morse, a veteran oil watcher who is head of commodities research at Citigroup. “Unprecedented in historical discussions of production cuts, the U.S. played a critical role in brokering between Saudi Arabia and Russia for the new OPEC+ accord.”
OPEC+ will cut 9.7 million barrels a day -- just below the initial proposal of 10 million. The U.S., Brazil and Canada will contribute another 3.7 million barrels on paper as their production declines. OPEC officials were still waiting to hear more from Group of 20 members -- though it’s not clear if those numbers will represent real cuts or just production idled because of market forces.
https://www.bloomberg.com/news/articles/2020-...nd=premium
The world’s top oil producers pulled off a historic deal to cut global petroleum output by nearly a 10th, putting an end to the devastating price war between Saudi Arabia and Russia.
After a week-long marathon of bilateral calls and four days of video conferences with government ministers from around the world -- including the OPEC+ alliance and the Group of 20 nations -- an agreement finally emerged to tackle the impact of the global pandemic on demand.
The talks almost fell apart because of resistance from Mexico, but came back from the brink after a weekend of urgent diplomacy, including the personal intervention of President Donald Trump, who helped broker the solution.
“Unprecedented measures for unprecedented times,”said Ed Morse, a veteran oil watcher who is head of commodities research at Citigroup. “Unprecedented in historical discussions of production cuts, the U.S. played a critical role in brokering between Saudi Arabia and Russia for the new OPEC+ accord.”
OPEC+ will cut 9.7 million barrels a day -- just below the initial proposal of 10 million. The U.S., Brazil and Canada will contribute another 3.7 million barrels on paper as their production declines. OPEC officials were still waiting to hear more from Group of 20 members -- though it’s not clear if those numbers will represent real cuts or just production idled because of market forces.
https://www.bloomberg.com/news/articles/2020-...nd=premium
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