OPEC members and other oil-exporting nations including Russia held talks on Thursday to try to put an end to the crude price war which began last month after exporters failed to reach an agreement on production cuts amid the global COVID-19-related economic downturn.
Russia and Saudi Arabia are “very, very close” to reaching an agreement aimed at stabilizing the oil market via cuts in output, Russian Direct Investment Fund CEO Kirill Dmitriev has said.
“I think the whole market understands that this deal is important and it will bring lots of stability, so much important stability to the market, and we are very close,” he said, speaking to CNBC on Thursday.
Two Distinct Proposals Reported
According to Iranian oil minister Bijan Namdar Zangeneh, there are two proposals on the reduction in output -one calling for a drop of 10 million barrels per day (bpd) and the other 11 million bpd.
Earlier in the day, Russian Energy Minister Alexander Novak said Moscow would consider it appropriate if all major producers were to join the OPEC+ effort to try to stabilize the global oil markets, since doing so would be in the interests of producers and consumers alike.
“Immediate and timely measures are needed, and we need to join forces with all oil-producing countries to alter the situation associated with the significant overproduction of oil in the world,” the minister said, speaking at Thursday’s meeting.
The minister also welcomed the participation of representatives from Canada, Norway, Argentina, Trinidad and Tobago, Egypt, Colombia, Indonesia, Chad, Ecuador, and other non-OPEC+ members in Thursday’s videocall, and said Russia would consider it appropriate to include them in any deal on output cuts.
Russia’s energy ministry estimates that supply exceeds demand by 10-15 million barrels per day, and that these figures may grow given the continued economic downturn in the wake of the coronavirus pandemic.
A sticker reads crude oil on the side of a storage tank in the Permian Basin in Mentone, Loving County, Texas, U.S. November 22, 2019. Picture taken November 22, 2019
Crude Surges Amid Reports of Possible Deal
Oil prices jumped Thursday ahead of the OPEC+ videocall, with Brent and WTI jumping 8.5-10 percent. As of this writing, Brent futures have climbed to $33.23, with WTI sitting at $25.90 and the OPEC basket at $22.67.
Ahead of the call, sources told Reuters that participants were considering cutting output by as much as 20 million barrels daily. Other sources suggested that major producers Russia and Saudi Arabia had managed to overcome their differences and agreed to a deal, whose details have yet to be worked out. Two OPEC+ sources speaking to Reuters indicated later in the day that producers are seeking a deal which may last ‘at least 2 years.’
Oil prices collapsed to their lowest levels since the late 1990s last month after OPEC+ failed to reach an agreement on production cuts amid the ongoing COVID-19 pandemic. The drop in prices has already led to the bankruptcy of at least one major US shale producer, while Russia and Saudi Arabia have been left dipping into their sovereign wealth funds to ride out the crisis.
Sourse: sputniknews.com
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