An unprecedented 15 million bpd cut still won't remove enough crude to stop the world's storage facilities quickly filling up. But this "free market" is itself fiction: the United States fracking industry, which anchors USA oil production growth, has benefited extensively from years of favorable legislation, tax breaks, and a supportive U.S. foreign policy which has used sanctions to restrict oil production in Iran and Venezuela to free up global market share which has been seized by USA producers.
Russian Federation and Saudi Arabia agreed in principle on Thursday to slash oil production, a move that could help U.S. producers that were devastated by the two countries' month-long price war.
Mexican President Andres Manuel Lopez Obrador said Friday that during OPEC discussions, he agreed with U.S. President Donald Trump that the United States will make up for what Mexico can not add to the proposed cut.
The minister also expressed appreciation for the efforts of OPEC and OPEC+ oil-producing countries to balance the market which is imperative for long-term sustainability.
But the group said a final agreement was dependent on Mexico, which balked at the production cuts it was asked to make.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies led by Russian Federation, a group known as OPEC+, kicked off an extraordinary video conference on Thursday to discuss oil production cuts.
Further G20 talks also saw major producers including the U.S. and Canada working towards their own cuts that could lop another 5 million barrels off global output.
Spurs players reminded of lockdown rules after training in London park
But staff have already received documents to sign stating they agreed with the pay-cuts and temporary changes to their contracts. The UK government says members of the public should stay at home to help stop the spread of coronavirus.
It said the cuts would be eased between July and December to 8 million bpd and further relaxed to 6 million between January 2021 and April 2022.
The first phase will gradually reduce the production of 10 million barrels of crude oil per day in May and June this year. However, delegates from the Organization of Petroleum Exporting Countries said they were unaware of the terms of the deal to which Mexican leader was referring. Governments on the state or federal level would have to "mandate a production cut", allowing the market to "answer this from a US perspective", Stephen Shorck, founder and editor of The Shorck Report, told FOX Business.
The US was invited to Thursday's Opec+ talks but it was not clear if it joined the video conference.
Fadhel said negotiations were still continuing to secure the participation of a larger number of major producers such as the United States, Brazil, Canada, Argentina, Columbia and Norway. PIMCO, which is one of the biggest investment funds, predicted that U.S. GDP could fall by as much as 30% in the second quarter and 5% for the full year.
The two nations fell out during an acrimonious meeting in Vienna in March, when a previous production deal collapsed.
Production has fallen by 50 percent since 2004 when it was 3.4 million bpd.
"We need to act now, so we can come out of other side of this pandemic with the strength of our industry intact".