OPEC outlines details of historic cuts after extraordinary meeting
The world’s leading oil nations tentatively agreed to cut production in a meeting held via webinar on April 9, in an effort aimed at stabilizing the volatile oil market.
In the meeting, the OPEC and non-OPEC oil producing countries agreed to cut their overall crude oil production by 10 million b/d, starting on May 1, 2020. This initial period of downward adjustment is expected to conclude on June 30, 2020.
For the following six months, the output cut will be 8 million b/d. It will be followed by a 6 million b/d adjustment for a period of 16 months, from January 1, 2021, to April 30, 2022.
However, the statement said that those measures were conditional on the consent of Mexico, which refused to agree on a 10 million b/d cut.
On April 9, the US benchmark West Texas Intermediate (WTI) crude oil futures fell $2.33 to settle at $22.76/barrel and Brent crude fell $1.36 to settle at $31.48/barrel. Earlier in the intraday session, the WTI futures rose more than 12% to trade at $28.36/barrel while Brent crude futures hit as high as $36.40/barrel amid reports that the deal could reduce output by 20 million b/d.
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