Third, a potential drop in oil prices below $20 billion, that the oil exports of the majority of oil producers in the Gulf and Russia will not bring much benefit, since the average cost of oil production in these countries is between 9 and 20 billion dollars (and up to 44 billion dollars for new projects) ” The main reason for the reduction in production is due to the fact that the reduction in production is due to the fact that the Russia and Saudi Arabia are 2.5 million barrels per day, 11 million barrels agreed and slightly higher than 11 million barrels per day. More importantly, most of 2019 was very bad for Russia in terms of the previously agreed Opec cuts. It is therefore unlikely that the market will take the announced reduction at face value. This is not necessary to determine whether these companies will be able to maintain their dividends, he added. “Through the grace of Allah, and then with wise leadership, continuous efforts and ongoing conversations since dawn on Friday, we now announce the conclusion of the historic agreement to reduce OPEC members` production by about 10 million barrels of oil per day from May 1, 2020,” Dr. al-Fadhel wrote in a tweet. President Trump said Friday that the United States could cut oil production to “catch up with the slump” caused by Mexico`s lack of willingness to make deep cuts. It is not clear how such reductions would be made, as the White House does not dictate the production levels of private oil companies; It would be a remarkable turning point in U.S. policy if the country began to make voluntary cuts in oil production. But even this does not mean that the oil market will stabilize by 2021.
The global economy will continue to “burn” additional barrels of oil in reserves during the peaks of oversupply in the first half of 2020, extending the period of low oil prices beyond January 2021. He thinks that oil prices will remain low, even if OPEC reduces production because “whatever they cut, they can`t sell anyway,” given the “massive” drop in oil demand. OPEC and its allies on Saturday extended their record restrictions on oil production until July, delegates said after Iraq and Nigeria agreed on deeper cuts to compensate for their failure to comply with recent agreements. Saudi Arabia and Russia agreed on Sunday with other oil-producing nations to cut production by 9.7 million barrels per day for the next two months to stem a drop in oil prices caused by the coronavirus pandemic and the feud between Moscow and Riyadh. The United States, which is not participating in OPEC meetings, had pushed Moscow and Riyadh to reach an agreement. President Trump met Thursday on a conference call with Russian President Vladimir Putin and Saudi King Salman, White House aide Dan Scavino said on Twitter. Read:Trump vows U.S. energy sector will come back as he sees Russia-Saudi oil agreement Saudi Arabia and Russia typically take the lead in setting global production goals.
But President Trump, facing a new election campaign before a re-election campaign, a falling economy and U.S. oil companies facing falling prices, took the unusual step of engaging after the two countries engaged in a price war a month ago.