Putin Is Ready To Cut Oil Supply, But Demand Destruction Still Grows

Russian President Vladimir Putin said on Friday that, after sending the oil markets into a massive crash a month ago by blowing up the OPEC+ exports limitation agreement, his country is now ready to work with OPEC and other countries to implement far deeper cuts to crude production than OPEC+ had ever envisioned.

Speaking in a televised video conference, Putin proposed an arrangement that would result in removing 10 million barrels of crude oil per day from global supply. As reported by the Khaleej Times, “Putin’s dramatic change of tack from his unyielding stance of non-cooperation with the Opec in further output cuts came in the wake of a truce brokered by US President Donald Trump ahead of the upcoming Opec plus meeting scheduled for April 6.” The price for West Texas Intermediate closed at $28.34 per barrel on Friday, up by 40% since Wednesday, when news of Trump’s engagement with Putin and Saudi leader Mohammed bin Salman became public.

Has President Trump, the famous deal-maker, worked a deal that will save the U.S. domestic oil and gas industry? Let’s don’t get ahead of ourselves. While a global deal that would remove 10 millions barrel from daily oil supply would certainly help firm up oil prices, we have to remember that the effort by Russia and Saudi Arabia to flood the market only impacted the supply side of a two-sided equation. Crude prices had already dropped by more than 30% into the low-$40 range in early March before OPEC+ blew up, thanks to massive global demand destruction caused by the COVID-19 pandemic.

With the U.S. intentionally shutting down its own economy during March in a strategy to slow the spread of the virus, that demand destruction has only intensified over the past 30 days, with some projecting as much as 25% of world-wide demand for crude oil having been lost, or about 25 million barrels per day. We should also realize that, with so much anticipation now focused on it, if the upcoming emergency meeting of the OPEC+ countries should somehow fail to bear fruit along the lines proposed by Putin, then the price will come crashing back down.

And even if a new deal does get done, it will only address one side of the equation. There will still be much work to be done to return the domestic oil and gas industry to some level of health.

Read the Rest at Forbes.com

12 thoughts on “Putin Is Ready To Cut Oil Supply, But Demand Destruction Still Grows

  1. Jimmy MacAfee - April 4, 2020

    Demand must be restored. And to restore demand, we must make hydroxychloroquine or similar drugs commonly available (by prescription.) Gates wants to keep it under lock and key, and for us to shut down – which will kill oil and gas all over the world, killing hopes of everyone. Including Russia, SA and our nation.

    There needs to be an immediate manufacture and distribution of the drugs to be used for direct care personnel, and people who work with the public (people who work at Walmart and other stores.) This sh-t has gone on long enough! Gates and anyone associated with him should be under investigation – he’s a James Bond type villain, without the funny accent or physical deformity (other than looking like Berkely Breathed’s creation, “Bill the Cat.”)

    Oil will recover when economies are set free to produce and sell again. Not a second before! And since Globalists want to see most of us dead, and for gas and oil to die, we need to end the Globalist nightmare.

    1. Gregg - April 4, 2020

      You know Jimmy, the one thing I don’t understand about the globalist agenda is why would they want most of us (the actual peaceful producers) dead? To what purpose? Obviously ‘the One’ and Walking Eagle and their acolytes want to be president, and in charge of the death of America as founded, but, again, to what end? Who would want to be in charge of a failed state such as Kenya?

      I have never really understood the motivation of people who want to be in charge of a desolate, starving country or world when the alternative could and would be peace and prosperity for most if not all the world’s population.

      I can think of no other reason than these people are the personification of pure evil looking to destroy GOD’s magnificent creation. If that is the case, then GOD will ultimately have to be the overall fixer, as no earthly being, or beings, will ever be able to fully overcome the world-wide force of evil arrayed against him/them.

      If that is the case then all our huffing and puffing signifies nothing – it’s academic.

      Maybe it is better to live where ignorance is bliss, because, unless some of today’s evil is really dealt with by earthly means, it will ultimately be folly to be wise.

      1. Jimmy MacAfee - April 4, 2020

        Satan hates mankind; Satan hates Israel and the United States. The United States is the biggest distributer of G0D’s Word, and still is the biggest official Christian nation.

        Why do Globalists want 5.5 billion people dead? As you intimated, they’re acolytes of Satan. Satanists and Luciferians are not the same, but they both hate the G0D of Israel and the Holy Bible.

        Globalists NEVER worship the G0D of Abraham and Isaac, nor His Son, Jesus Christ; those who claim they do, lie. This is, as you said, a matter for G0D, but He has always used us to be His arms, as He did in the fight against Hitler and Stalin. We cannot be passive, and we always need to look for and ask for His guidance.

        All of these words I just wrote will deeply anger those who hate the Holy One of Israel, Who is the Creator of the Universe.

      2. Jimmy MacAfee - April 4, 2020

        A second, more practical answer to your question:

        The Globalists think we have sufficient technology that there is no further need for “useless eaters.” Most things can be manufactured by machine, with little human interface, particularly with AI.

        Some have proposed a universal income for all, with few people actually working, and government taking care of everybody’s needs. (“Let the robots do the work! We’ll all bask in the sun!”) Unfortunately, reality begs to disagree; what is one day a benefactor can turn rogue, treacherous, murderous and evil. Whether it’s AI or a World Government, promises will be as Communists have always promised: millions of dead – this time billions.

        There are monuments (one in NC) to a population of 1.5 billion. This is a central tenet to their new religion.

    2. phineas gage - April 4, 2020

      I agree with Jimmy. More specifically, I think what is going to happen, since we cannot keep on over the cliff of economic armageddon, is that Trump will soon issue an edict along these lines:

      *Normal (low-risk) individuals return to work with the stipulation that masks be worn to reduce viral transmission (and perhaps other behavioral modifications).
      *High-risk individual (elderly, immunocompromised) remain in the social distancing protocol for the near future, at least until it is clear that the epidemic has peaked and is subsiding.
      *Hydroxcholoroquinine is made widely available

      There simply is no other choice. And of course this mandates that drug and mask production be ramped up very quickly. As a nation we can do this; we’ve done it before.

      It’s not just the energy industry, but the entirety of the economy.

      I think once that is addressed and a sense of getting back to normal is achieved, the unique demands of the energy sector can be addressed.

  2. Gregg - April 4, 2020

    Dave,

    Do you think my recent comments on the US oil production supplying only US markets in view of our supply being roughly equal to our demand is feasible? Or are we so inexorably linked to the whims of the world oil/energy market that we will always have to play along with their (our enemies) artificial price fixing which is always designed to hurt either the US economy or its domestic oil/energy industry one way or the other?

    If we can et away from a dependence on China for drugs etc., why not the world with regards to oil/energy?

    1. David Blackmon - April 4, 2020

      Unfortunately, it’s not feasible mainly because most of our refining capacity was set up to refine heavy crude grades coming in from the Middle East, South America and Canada. The shale oil being produced is a very light grade of crude, and we do not have the domestic refining capacity to process it all. That’s why so much of it is being exported rather than being used here.

      1. Jimmy MacAfee - April 4, 2020

        There’s part of your answer: build refineries to deal with light crude domestically.

        1. David Blackmon - April 4, 2020

          Good suggestion, but it takes years to even get a damn refinery permitted in this country, then years more to get through all the lawsuits challenging the permits, then years more to get the damn things built. All the delay and litigation triples the real cost of the development, which would be in the billions regardless. Maybe we can convince San Fran Nan to put $200 billion into her next stimulus bill to pay for it all.

          1. Gregg - April 4, 2020

            I think Trump can cut through most all that BS. We built refineries before all that crap. Nuclear too. If DJT can get that done, he will be known as our greatest president ever!

  3. Jimmy MacAfee - April 4, 2020

    The same people who cry “climate change” don’t want hydroxychloroquine to be available (except for small testing sites.) They want to sell their vaccine, and Bill Gates wants everybody who gets the vaccine to take the mark of the beast (a chip or implant.) He wants the population of the world to go down to 1.5 billion, and he wants the world economy to stop.

    Globalists are clearly behind the distribution of this virus, and should be held responsible. They’ve politicized the virus (Pelosi, Schumer, Schittforbrains) and they want the destruction of all oil nations – US, Russia, SA and others. A new alliance or alliances should be considered if this continues.

    I’m not sure if the Chinese leadership is in control of China, or if their internal Globalists are trying to kill as many of the population as possible. Estimated 1 million deaths, according to sources. And rising.

    Trust no one. But G0D.

  4. Jimmy MacAfee - April 4, 2020

    Prediction: with all the oil sailing around in ships, with nowhere to distribute, expect “accidents” and oil spills. Remember that the Glooobalists (spelling intentional) want to destroy oil.

    First they start a glut by starting pumping wars between producers, then they destroy economies with pandemic(s.) Next stage: create an ecological crisis and cause a depression in oil shippage.

    Note to oil and gas industry: protect your ships at all costs from saboteurs.
    (Got that, Dave? Prepare.)

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