OPEC plans for video conference reported
Oil producing countries of the OPEC cartel will meet via video link on Monday to discuss a possible production cut. That’s what a cartel representative said. Other major oil producers such as Russia and the United States may also participate in the meeting. There is no confirmation for that yet.
The reason for the consultations is the call by US President Donald Trump to Russia and Saudi Arabia to end their price war. The two countries disagreed at the previous consultation of the oil cartel. As a revenge action, they promised to pump up more oil instead of less. That caused a crash in oil prices. The situation on the oil market was already very fragile due to the unprecedentedly high drop in demand due to the corona virus.
According to Trump, the Russians and Saudis want to cut their oil production to 10 million barrels a day. That is roughly equivalent to one-tenth of oil production worldwide. The Kremlin denies that talks are underway with Saudi Arabia. That country, in turn, said it wants to make a “fair deal” with OPEC countries and allies. An OPEC + representative, which includes the cartel and its allies, confirmed that 10 million barrels a day is a realistic goal.
A deal on a production cut depends on how many countries want to participate. Saudi Arabia only wants to pump up less oil if other producers, including the US, start sharing the pain. Trump will talk to the largest American oil companies on Friday. Production reduction is one of the options on the table.