Leaders of the world’s top three oil producers, Russian President Vladimir Putin, US President Trump and Saudi Arabia’s King Salman, all supported the OPEC+ deal to cut global crude output, the Kremlin said on Sunday.
The US President was facing pressure to support the energy sector, which was ravaged by the coronavirus pandemic.
The OPEC+ group, led by Saudi Arabia and Russia, finalised plans to cut oil production by a combined 9.7 million barrels per day.
OPEC producers said the cut global petroleum output could in total remove around a fifth of global oil supply.
Trump announced on Twitter on Sunday: “The big Oil Deal with Opec Plus is done.
“This will save hundreds of thousands of energy jobs in the United States.
“I would like to thank and congratulate President Putin of Russia and King Salman of Saudi Arabia.
“I just spoke to them from the Oval Office.
“Great deal for all!”
The deal was at risk of falling apart when Mexico saught an exemption from the deal, angering Saudi Arabia.
US pressure led to them conceding a smaller cut to the smaller oil producer.
The cuts will begin in May for two months and then diminish in size before expiring in April 2022.
The cartel’s big Gulf producers, Saudi Arabia, the United Arab Emirates and Kuwait, will deepen their own cuts, adding to the total.
Worldwide coronavirus cases have been rising to a total of 1,849,472.
The United States remains the country with the highest infections, with 558,447.
As of Sunday evening, the country had seen a total of 21,991 deaths, with 1,414 in one day.
Russia and Saudi Arabia reported 15,770 and 4,462 confirmed cases respectively.
Meanwhile, Oil prices jumped more than $1 a barrel on Monday after major producers finally agreed their biggest-ever output cut, but gains were capped amid concern that it won’t be enough to head off oversupply with the coronavirus pandemic hammering demand.
Brent crude LCOc1 futures rose $1.23, or 3.9%, to $32.71 a barrel by 0058 GMT after opening at a session high of $33.99. U.S. West Texas Intermediate (WTI) crude CLc1 futures were up $1.39, or 6.1%, to $24.15 a barrel, after hitting a high of $24.74.
IHS Markit Vice Chairman Daniel Yergin said: “What this deal does is enable the global oil industry and the national economies and other industries that depend upon it to avoid a very deep crisis.
“This restrains the build-up of inventories, which will reduce the pressure on prices when normality returns – whenever that is.”
Published at Mon, 13 Apr 2020 01:08:00 +0000