OPEC+ and the G20 have agreed to cut oil production by just under 10 million barrels / day.
Oil trading begins for the week at 2200GMT with Sunday evening trade on CME,
I posted the main points gleaned so far from various sources: OPEC+ oil output cut deal agreed Sunday
ICYMI … :
- a cut of circa 9.7 million barrels a day of oil across OPEC+ and the G20
- 13-nation OPEC and others (Russia, US are two) agreed to share cuts
Its unclear how the cuts are to be apportioned, and how the US intends to enforce its promised cuts, but indications are (its is very unclear, but these from sources, awaiting confirmation):
- Mexico cut 100,000 barrels a day
- US by 300,000 barrels / day
- Saudi Arabia's production to be reduced to 8.5m bpd (from the current whopping 12 million bpd)
When oil trade reopens for the week we'll see how successful the agreement is, so far, at limiting further price falls for oil.
The important factors that the supply cut does not, is not able, to address is of course is the demand side of the equation. Demand is lower due to:
- social distancing lock downs of economies
- the further, recessionary economic impact of these measures (the impacts will linger)
Back to the supply side to finish up, there is a huge overhang of oil in storage.