Record deal to cut oil output ends price war

[Eugene]

Source: BBC

Record deal to cut oil output ends price war

12 April 2020

Opec producers and allies have agreed a record oil deal that will slash global output by about 10% after a slump in demand caused by coronavirus lockdowns.

The deal, agreed on Sunday via video conference, is the largest cut in oil production ever to have been agreed.

Opec+, made up of oil producers and allies including Russia, announced plans for the deal on 9 April, but Mexico resisted the cuts.

Opec has yet to announce the deal, but individual nations have confirmed it.

The only detail to have been confirmed so far is that 9.7 million barrels per day will be cut by Opec oil producers and allies.

US President Donald Trump and Kuwait's energy minister Dr Khaled Ali Mohammed al-Fadhel tweeted the news, while Saudi Arabia's energy ministry and Russia's state news agency Tass both separately confirmed the deal on Sunday.

-snip-

Read more: https://www.bbc.com/news/business-52264546

[customerserviceguy]

1. I know that this will disappoint some

but it's good news for renewable energy. Super low oil and gas prices don't help sell hybrid or electric vehicles.

[mitch96]

3. I just read that Toyota is having a booming year selling RAV4 Hybrids....

Can't keep'em on the lot... Even with the slow down..
m

[mitch96]

2. I wonder which country will suffer the most from this cut?

Russia??? Putin's whole economy is built on oil...
m

[thucythucy]

4. Low prices hurt the Russian economy

this is a move that will strengthen it (and thus help Putin).

[mitch96]

5. But if russia cut's production that means they won't sell as much,right? nt

[thucythucy]

7. Possibly.

But increasing the price might make up for a decrease in sales, especially if, as seems to be the case, demand has reached an all-time low already. If demand has bottomed out, then increasing the price won't bring a drop in demand. only an increase in money for Russia and OPEC and other producers.

[safeinOhio]

6. Useless

What good does 10% cut do when demand is down 40%?

Gonna be a whole lot of cheating going on in 4..3...2..1.