OPEC and Russia meet again to approve largest oil cut in history By Reuters

By Katya Golubkova, Rania El Gamal and Ahmad Ghaddar

BAKU / DUBAI / LONDON (Reuters) – OPEC, Russia and other oil-producing nations met on Sunday in an attempt to close a deal on the largest oil cut in history, which represents 10 percent of world supply, after his initial efforts to support oil. Prices in the midst of the coronavirus pandemic were blocked by Mexico.

The group, known as OPEC +, started a video conference at 1715 GMT.

On Thursday, OPEC + outlined plans to cut production by more than a fifth, or 10 million barrels per day (bpd), but Mexico resisted the production cuts it was asked to make, delaying the signing of a final agreement.

“The ministerial meeting between OPEC members and non-OPEC members is a follow-up after the April 9 meeting,” the OPEC + Azerbaijani member energy ministry said on Sunday.

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.

OPEC + also 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 have expressed their willingness to cut, and the United States, where legislation makes it difficult to act in concert with cartels like OPEC, has said its output will drop sharply this year due to low prices.

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.

((For an analysis of the reasons behind Mexico’s confrontation with OPEC + click)

Trump, who had threatened Saudi Arabia with oil tariffs if it did not solve the market’s oversupply problem, said Washington would help Mexico by picking up “some slack” and that it would be reimbursed later.

He did not say how this would work and OPEC leader Saudi Arabia has so far refused to accept the solution, according to OPEC sources.

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 (NYSE 🙂 and UBS predicted last week, saying prices would fall again to $ 20 a barrel from $ 32 right now and $ 70 at the beginning of the year.