Saudi Arabia Eyes Additional Oil Production Cuts
Saudi Arabia is reportedly pushing to cut global oil production by 20 million barrels per day, more than double the figure agreed to over the weekend by the OPEC+ and G20 groupings of nations. “We have to watch what is happening with demand destruction and demand improvement, depending on how things evolve,” Riyadh’s energy minister was quoted as saying. US President Donald Trump, who has been pushing for a cut in global output, weighed in on Twitter: “Having been involved in the negotiations, to put it mildly, the number that OPEC+ is looking to cut is 20 Million Barrels a day, not the 10 Million that is generally being reported. If anything near this happens, and the World gets back to business from the Covid 19 disaster, the Energy Industry will be strong again, far faster than currently anticipated.” According to analysts, the coronavirus pandemic has caused a decrease in worldwide demand by about 20 million bpd. Despite the largest-ever deal to cut oil production, markets responded tepidly to the move, with a barrel of global benchmark Brent crude rising just 1.5% to about $31. Last month, Saudi Arabia abruptly decided to ramp up supply while slashing prices, sparking a battle for market share, specifically against Russia, that caused oil prices to plummet to 18-year lows.