The OPEC++ Deal: Calling it a Half-Measure is an Exaggeration

Let’s be honest: The so-called OPEC++ agreement to cut 10 million barrels of oil per day from global crude oil supply is a half-measure. Really, with Rystad Energy reporting that demand for oil will drop by 27 million bopd from January 1 levels during April, calling it a half-measure is an exaggeration.

Even this half-measure has still not been finalized, as Mexico’s government still has not committed to holding up its end of the bargain as of this writing on Friday morning. So, anything could still happen. All of which explains why the oil markets reacted negatively to the OPEC++ announcement, with oil prices dropping by more than 15% in just a few hours.

But here at least are the parameters of the agreement that are being reported Friday morning:

– OPEC++ (the OPEC nations plus Russia, Mexico, Canada, Brazil and several others) agree to cut 10 million barrels per day of exports from April through July;

– The cuts drop to 8 million bopd from August 1 through December 31;

– The cuts further fall to 6 million bopd beginning January 1, to continue for the next 16 months;

– The cuts include no formal contribution from the U.S. oil and gas industry.

President Donald Trump will discuss his views of America’s contribution to a reduction in global supply in a call involving the Group of 20 – or G20 – on Friday.

 

Read the Rest at Shalemag.com

2 thoughts on “The OPEC++ Deal: Calling it a Half-Measure is an Exaggeration

  1. Jimmy MacAfee - April 10, 2020

    There will be a rebound for demand, once this flu is done. Prices will rise as soon as people begin to move again. That is, if Dr. Fauci will permit us to move – (he’s enjoying his little moment a bit too much, isn’t he?)

    Time for some changes.

  2. Harry Culver - April 10, 2020

    He is only obeying his owners.

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