Saudi, Russia agree to cut oil: Mexico has pulled out of negotiations over a major oil production deal involving a group of 23 countries, jeopardizing the final agreement and causing a steep fall in the price of oil.
On Thursday, expectations were that a final resolution on a 23-nation coalition would come to an end at the end of a month-long feud between Saudi Arabia and Russia, aimed at implementing large-scale oil production cuts.
OPEC +, Russia and other allies on Thursday outlined plans to cut their oil production by more than a fifth and said they expected the United States and other producers to raise prices to deal with the coronavirus crisis Will join.
The historic settlement of Mexico has now jeopardized the historic settlement and caused oil prices to fall.
On Friday morning, US crude was trading 9 percent, or $ 2.33, at $ 22.76. Brent crude is down 4 percent, or $ 1.36, at $ 31.48.
The negotiations are scheduled to continue in a group of 20 meetings of energy ministers on Friday, but OPEC + is not believed to have made the cut without Mexico’s involvement.
The Kremlin said Russian President Vladimir Putin, US President Donald Trump, and Saudi Arabia’s King Salman discussed in a phone call on Friday the OPEC + oil group meeting and confirmed that they aimed to stabilize global oil trade.
Oil-producing countries, including the OPEC cartel and Russia, are trying to strike a global agreement to pump less crude in a bid to reduce the price crash, which is welcome for consumers, in government budgets.
Pressurizing and pushing energy companies towards bankruptcy.
Late on Thursday, OPEC and Russia reportedly reached a temporary deal to cut production by 10 million barrels per day for two months.
But Kuwait’s oil minister later tweeted that Mexico had disrupted the deal.
President Trump said he spoke with Russian President Vladimir Putin and Saudi Arabia’s King Salman about the talks.
At a White House news briefing, Trump said, “They are getting closer to a deal that is out of OPEC and many other countries and we will see what happens.”
He said, “There is so much production that nobody even knows what to do with it, it is working.”
Reports of a deal were welcomed by the American Petroleum Institute, which counts the largest number of US oil and gas producers among its members.
Saudi, Russia agree to cut oil
“This move will help stabilize the world’s oil markets,” said API President Mike Samaras, as the historic decline in the COVID-19 epidemic due to the current market interruption largely poses significant challenges to the supply chain Huh.”
But by early Friday, Kuwait oil minister Khalid al-Fadl suggested that the deal had not yet been reached.
Al-Fadl wrote, ‘The meeting for the OPEC group ended at 3 pm. Mexico disrupts all countries ‘agreement to reduce oil production by 10 million barrels a day.’
There was no immediate response from Mexico, although its Energy Minister Rocio Nahle wrote on Twitter around the same time that Mexico proposed cutting its production by 100,000 barrels per day for the next two months.
Thursday’s nine-hour OPEC video conference was part of a series of talks on stabilizing the market, where oil prices have risen more than half since the beginning of the year amid a pricing war between Saudi Arabia and Russia.
The drop was intensified when the coronavirus epidemic caused a global halt in oil demand and increased oil demand as a trading base.
At current production rates, storage tanks will be filled with oil for some time in May, and the only way to avoid filling them will be to maintain the cuts until the end of the year, he said.
When Russia and OPEC failed to agree on a production cut in early March, the oil market was already oversimplified.
Analysts say Russia also refused a minor cut because it would have only served to help American energy companies, which were pumping to full capacity.
Staling served to harm American shale-oil producers and protect market share.
Russia’s move appeared to offend Saudi Arabia, which not only said it would not cut production on its own but said it would increase production and effectively lead to a global pricing war.
Sales prices will decrease.
In the time since prices have fallen.
International benchmark Brent crude traded at $ 34 a barrel on Thursday, while US benchmark West Texas crude traded at less than $ 27.