April 10, 2020
–
The oil producing countries united in the OPEC + association have agreed on a crude oil production brake after a tough struggle. In doing so, they want to stop the price slide of their important export goods. The OPEC + group of states, which includes other countries such as Russia in addition to the members of the export cartel, agreed to cut daily production by ten million barrels (159 liters each).
This corresponds to about ten 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 of the oil markets.
Talks were complicated by the slump in demand due to the coronavirus pandemic and the United States’ refusal to cut production as well. According to experts, the US shale oil producers need an oil price of around $ 50 a barrel (159 liters) to work 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.
–
–
