The Opec group of states, which, in addition to the members of the export cartel, includes other countries such as Russia, agreed to cut daily production by 10 million barrels (159 liters each), according to a statement by the association on Thursday.
This corresponds to about 10 percent of the global supply. The reduction should apply to the two months of May and June. After that, the delivery rate should be further reduced. Another Opec meeting via video conference should take place on June 10 to evaluate the situation in the oil markets.
The agreement still depends on whether Mexico joins it. Talks were further complicated by the slump in demand due to the coronavirus pandemic and the US refusal to cut production.
Fall in prices at the beginning of March
According to experts, the US shale oil producers need an oil price of around $ 50 a barrel to operate profitably. The US oil grade WTI currently only costs about $ 23. The first shale oil companies have already applied for bankruptcy protection.
In early March, the fall in prices was triggered by Russia’s refusal to further cut production volumes due to the coronavirus crisis. Restrictions to contain the pandemic have reduced global crude oil demand by around a third or 30 million barrels a day within a few weeks.
(reuters / sda)
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