the Major producing countries have United in order to “balance supply and demand was achieved in a managed way”. About it today at press conference said the head of the Ministry of energy Alexander Novak, commenting on the Sabbath agreements within the framework of the new deal OPEC+.
however, he pointed out that all countries are interested in high rates of recovery in the economy and oil demand to the level that preceded the introduction of restrictive measures in connection with the spread of coronavirus infection COVID-19, reports “Finmarket”.
As like an expert on Finance CEX.IO Broker Alexander Yanuk, “last week the most significant event was undoubtedly the meeting of the countries-exporters of oil within the OPEC format+”. “The decision was made to extend the reduction of oil production until the end of July, while the overall quotas to 9.7 million barrels per day. Despite the fact that the agreement left Mexico, the situation with the balance of supply and demand will gradually improve. They also found that some countries, such as Iraq and Nigeria, did not fulfill the agreements in may, so they will have to do it during July, August and September,” — said in the review analyst.
the expert on the stock market “BCS” Igor Galaktionov indicates that “after approval of the terms of the deal, Saudi Arabia had announced an increase in July prices for its export variety of oil Arab light crude for Asian buyers”.
we Add that since the beginning of this year on the global oil market rode several waves of falling prices for “black gold”. The negative situation caused by a whole complex of factors: a General overproduction of raw materials, a sharp drop in demand due to the rapid spread of coronavirus infection COVID-19 (March 11, was declared a pandemic) and concerns about its impact on the global economy and the collapse of the deal, OPEC+ (officially from April 1, but FAchicosci after fruitless negotiations of the countries-oil producers at a meeting on March 6 in Vienna). Just last circumstance was the trigger to the collapse in oil prices. Moreover, Saudi Arabia announced plans to increase production and lower oil prices. Later, the desire to lower the prices declared Iraq, Kuwait, UAE and Nigeria.
For the first quarter of 2020, the price of Brent crude fell by 65.6%, while WTI rose by 66.5%. And at the end of March the cost of June futures on Brent fell below $22 per barrel (to $of 21.72), that is, to at least March 2002, and the may futures for WTI to us $20.1.
on April 12 OPEC countries+ finally agreed on a new deal, joined by 23 States. The agreement will be valid for two years, from may 1, 2020 to may 1, 2022-th. In may—June this year, the production cuts will amount to 9.7 million barrels per day (from October 2018), then — until the end of 2020 — 8 million barrels, and 6 million by the end of April 2022. While Russia and Saudi Arabia base count will be 11 million barrels per day (of the Russian Federation in the first 2 months will reduce production at 2.5 million barrels per day). New business OPEC+ was a forced reaction of oil producing countries on the situation in the market and pressure from the United States. Overall, however, it does not cover the volume decline in world demand for the same in the market have accumulated huge reserves of raw materials.
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