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By Katya Golubkova and Rania El Gamal and Ahmad Ghaddar 
5h ago
OPEC, Russia and other oil-producing nations agreed on Sunday to cut production by a record amount, accounting for about 10% of world supply, to support oil prices amid the coronavirus pandemic.
The group, known as OPEC +, agreed to cut production by 9.7 million barrels per day (bpd) for May-June, after four days of marathon talks and after pressure from United States President Donald Trump to stop the decline in prices.
Two OPEC + sources told Reuters that the deal had been sealed in a video conference on Sunday, and the deal was confirmed in a statement from the Kazakhstan Ministry of Energy.
In the largest cut in oil production in history, countries will continue to gradually reduce production restrictions for two years until April 2022.
Measures to curb the spread of the coronavirus have destroyed fuel demand and lowered oil prices, straining the budgets of oil producers and affecting the US shale industry. The US, which is more vulnerable to low prices due to higher costs.
Trump had threatened the OPEC leader, Saudi Arabia, with oil tariffs and other measures if he did not solve the problem of market oversupply, as low prices have seriously endangered the US oil industry, the largest in the world. world.
OPEC + said it wanted producers outside the group, such as the United States, Canada, Brazil and Norway, to cut an additional 5% or 5 million bpd.
Canada and Norway had expressed their willingness to cut, and the United States, where legislation makes it difficult to act in concert with cartels like OPEC, said its output would drop sharply this year due to low prices.
However, the signing of the OPEC + agreement was delayed from Thursday, after Mexico opposed the production cuts it was asked to do.
Mexican President Andrés Manuel López Obrador said Friday that United States President Donald Trump had offered to make additional cuts in the United States on his behalf, an unusual offer from a Trump who has criticized OPEC .
Trump said Washington would help Mexico by picking up “some slack” and reimbursing itself later. He did not say how this would work.
Global demand for oil is estimated to have decreased by a third as more than 3 billion people are locked up in their homes due to the coronavirus outbreak.
A 15% cut in supply may not be enough to halt the drop in prices, banks Goldman Sachs and UBS predicted last week, saying Brent prices would fall again to $ 20 a barrel from $ 32 a barrel. time and $ 70 at the beginning of the year.
Reuters
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