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A perfect deal is where all protagonists get something out of it. All oil-producing countries stand to gain if oil price rebounds. In bare bones, the OPEC+ group led by Saudi Arabia and Russia finalised in a nail-biting photo finish on Sunday an agreement to steeply cut oil production by a combined 9.7 million barrels per day to rebalance the supply and demand in the world market and nudge the prices to go up.
It capped days-long tortuous international negotiations that also included the US. Additional cuts are expected from producers outside the OPEC+ group. Experts anticipate that by the second half of the year, oil prices would be nearing $40 per barrel.
The world’s oil producers are joining together for the largest cooperative production initiative in history. The tectonic plates are shifting in the geopolitics of oil.
Historically, the US rallied against the oil cartel as a threat to the American economy. But Washington not only joined the latest production programme but its success may actually hinge on the US, where oil production has doubled in a single decade.
Read more: Oil price war: In reality its about market share
That is to say, cuts can come from government action via corporate decisions, as companies either shut-in production or file for bankruptcy. The estimates are that the US production is projected to fall by 2 million barrels per day by year’s end and perhaps more. According to industry figures, the US’s drop in output could see exports shrinking from over 3 million bpd in 2019 to almost zero in the coming months, removing a key concern for both Russia and the Saudis amid fears of a US takeover of their traditional markets.
President Donald Trump has held direct talks in recent days with the heads of Russia, Saudi Arabia and Mexico. Although US, the world’s largest producer, has not offered firm production cuts, Trump and the US Energy Department have emphasised that market forces will bring US declines.
Read full article here:
Why the OPEC+ deal is full of magnificent features?!
A perfect deal is where all protagonists get something out of it. All oil-producing countries stand to gain if oil price rebounds. In bare bones, the OPEC+ group led by Saudi Arabia and Russia finalised in a nail-biting photo finish on Sunday an agreement to steeply cut oil production by a combined 9.7 million barrels per day to rebalance the supply and demand in the world market and nudge the prices to go up.
It capped days-long tortuous international negotiations that also included the US. Additional cuts are expected from producers outside the OPEC+ group. Experts anticipate that by the second half of the year, oil prices would be nearing $40 per barrel.
The world’s oil producers are joining together for the largest cooperative production initiative in history. The tectonic plates are shifting in the geopolitics of oil.
Historically, the US rallied against the oil cartel as a threat to the American economy. But Washington not only joined the latest production programme but its success may actually hinge on the US, where oil production has doubled in a single decade.
Read more: Oil price war: In reality its about market share
That is to say, cuts can come from government action via corporate decisions, as companies either shut-in production or file for bankruptcy. The estimates are that the US production is projected to fall by 2 million barrels per day by year’s end and perhaps more. According to industry figures, the US’s drop in output could see exports shrinking from over 3 million bpd in 2019 to almost zero in the coming months, removing a key concern for both Russia and the Saudis amid fears of a US takeover of their traditional markets.
President Donald Trump has held direct talks in recent days with the heads of Russia, Saudi Arabia and Mexico. Although US, the world’s largest producer, has not offered firm production cuts, Trump and the US Energy Department have emphasised that market forces will bring US declines.
Read full article here:
Why the OPEC+ deal is full of magnificent features?!
