OPEC to reduce oil production

OPEC to reduce oil production

OPEC to reduce oil production

Those moves came after a group of oil producing countries known as OPEC+, which includes Russian Federation, agreed to reduce production by 9.7 million barrels per day (bpd) for May-June, after four days of marathon talks.

"Secondly, the importance of this decision is not limited by the 9.7 million barrels per day production cut in May-June by OPEC+".

A 15 per cent 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 USA per barrel from $32 at the moment, and $70 at the start of the year.

Global oil cartel OPEC and its allies have agreed to the deepest production cuts in history.

"The United States will help Mexico along and they'll reimburse us sometime at later date when they're prepared to do so", Trump said at a White House press briefing Friday.

OPEC Secretary General Mohammad Barkindo called the cuts "historic" - and the agreement appeared to mark an end to a bitter price war between Riyadh and Moscow.

"They are largest in volume and the longest in duration, as they are planned to last for two years", he said.

The current agreement will be valid until April 30, 2022, with the review of an possible extension in December 2021.

Mexico's energy minister said on Twitter that the group of nations agreed to cut 9.7 million barrels a day from May 1.

Russian Federation and Saudi Arabia had been locked in a price war, as a dispute over who was to blame for plunging prices of crude oil intensified. Meanwhile, Russia and Saudi Arabia will reduce output by 2.5 million barrels per day each.

OPEC+ member countries will meet on June 10 this year via videoconference to determine whether any further actions are required to balance the global oil market. "Any increase in prices over the next few months is going to encourage producers to keep on producing".

The minister pointed out that Nigeria is going to get the benefit of the upside of the low prices, while admitting that government has introduced price modulation, which means that the price of petroleum products in Nigeria will be determined by the worldwide price of crude oil.

"Flexibility and pragmatism will enable us to continue do more if we have to", he told Bloomberg.

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