OPEC, Russia and other oil producing nations were meeting on Sunday in a bid to clinch a deal on the biggest oil cut ever, amounting to 10 percent of global supply, after their initial efforts to support oil prices amid the coronavirus pandemic were blocked by Mexico.
The group, known as OPEC+, was expected to start a video conference at 1600 GMT.
On Thursday, OPEC+ outlined plans to cut output by more than a fifth, or by 10 million barrels per day (bpd), but Mexico balked at the production cuts it was asked to make, delaying the signing of a final deal.
“The ministerial meeting between OPEC and non-OPEC members is a follow-up after the April 9 meeting,” the energy ministry of OPEC+ member Azerbaijan said on Sunday.
Measures to curb the spread of the coronavirus have destroyed demand for fuel and driven down oil prices, straining budgets of oil producers and hammering the US shale industry, which is more vulnerable to low prices due to its higher costs.
OPEC+ also said it wanted producers outside the group, such as the United States, Canada, Brazil and Norway, to cut a further 5 percent or 5 million bpd.
Canada and Norway signaled willingness to cut and the United States, where legislation makes it hard to act in tandem with cartels such as OPEC, has said its output would fall steeply by itself this year due to low prices.
Mexico President Andres Manuel Lopez Obrador said on Friday that US President Donald Trump had offered to make extra US cuts on his behalf, an unusual offer by a Trump who has long railed against OPEC.
Trump, who had threatened Saudi Arabia with oil tariffs if it did not fix the market’s oversupply problem, said Washington would help Mexico by picking up “some of the slack” and being reimbursed later.
He did not say how this would work and OPEC leader Saudi Arabia has so far refused to accept the fix, according to OPEC sources.
Global oil demand is estimated to have fallen by a third as more than 3 billion people are locked down in their homes due to the coronavirus outbreak.
A 15 percent cut in supply might not be enough to arrest the price decline, banks Goldman Sachs and UBS predicted last week, saying Brent prices would fall back to $20 per barrel from $32 at the moment and $70 at the start of the year.
Read more:
Oil traders suffer as coronavirus market glut fills UAE’s Fujairah storage
Mexico’s secret oil investments may explain why it is holding out in OPEC oil deal
Explained: Has Mexico derailed a potential armistice in the Saudi-Russia oil war?
Also Read
-
Mexico’s secret oil investments may explain why it is holding out in OPEC oil deal
As Mexico and Saudi Arabia fight over a deal to bring the oil-price war to an end, Mexico has a powerful defense: a massive Wall Street hedge ... Energy -
Global oil cuts of 10-15 mln bpd ‘only temporary support’ for prices: Experts
Oil prices have been under pressure as the coronavirus pandemic has severely curtailed demand for petroleum products.Meetings of the Organization of ... Features -
UAE says largest OPEC+ output cut will have a major impact on rebalancing oil market
United Arab Emirates’ energy minister Suhail al-Mazrouei said on Saturday that an OPEC+ decision to cut oil supply will have a major impact on ... Energy
