OPEC and Russia and other oil-producing countries coordinate at 9th meeting to reduce production

OPEC and Russia and other oil-producing countries coordinate at 9th meeting to reduce production April 9 at 9:15

In order to raise crude oil prices that have plummeted due to a decline in global oil demand, OPEC and oil-producing countries such as Russia have coordinated an urgent meeting to reduce production on Monday. Continue. However, the United States, the world's largest oil-producing nation, has been cautious about the need to participate in the cut, and it is focused on agreeing to resume the cut.

Saudi-led OPEC and Russia and other oil-producing nations will hold urgent teleconferences on Tuesday in response to the demands of the United States, which is hitting its energy-related companies with low oil prices. We continue to adjust with.

Saudi Arabia and Russia confronted over an oil-producing nation's meeting earlier this month over the scale of the cut, and the oil-producing nation's system to cut production was terminated at the end of last month. However, after Trump in the United States urged a massive cut in production of more than 10 million barrels per day, both countries have shown a positive stance on resuming cuts.

However, among oil-producing nations, if the unilateral reduction in production is resumed, companies such as the world's largest oil-producing nations, the United States and Canada, that have not participated in the consultation framework, will maintain crude oil production if they continue to produce crude oil. There is a persistent concern that you may be losing your share.

For this reason, the United States and other countries are persistently cautious that they should participate in reducing production, and the focus is on whether they can agree to resume production reduction.

Saudi and Russia Why cut production again

Saudi Arabia and Russia have turned their stance on cooperative cuts in crude oil production, as the U.S. Trump administration is pushing for cuts to raise crude oil prices and increasing output amid falling demand. There is a view that there are circumstances that make it difficult to find buyers.

OPEC led by Saudi Arabia and oil-producing nations such as Russia talked earlier this month over the three-year expansion of coordinated cuts in production to respond to falling demand due to the spread of the new coronavirus infection. However, talks broke down, including Russia's opposition to additional cuts, and cooperative cuts were cut off.

In response, Saudi Arabia changed its mindset and announced a policy of launching a large-scale increase in production, and began to compete on prices, taking advantage of low production costs to take market share from other countries. In response, Russia and other countries have turned to increasing production.

Concerns over oversupply in the crude oil market have widened, and the WTI futures price in the New York market, which initially exceeded $ 60 per barrel, plunged to around $ 19 per barrel last month for about one month. I interrupted a milestone of $ 20 for the first time in 18 years.

Under such circumstances, President Trump of the United States urged oil-producing countries to cut production on a large scale, and Saudi Arabia responded by proposing an urgent meeting to OPEC member countries and oil-producing countries such as Russia on February 2 to cooperate. Coordination among countries is continuing to reduce production.

Some say Saudi Arabia aims to maintain good relations with the allied U.S. Trump administration, and some say that Russia intends to seek improved relations with the chilled U.S. .

The background of Trump's active intervention

President Trump of the United States has been actively intervening in this issue after the end of the Saudi-led OPEC, an oil exporter mechanism, and a cutback in production by Russia and others.

Behind this is the serious impact on the energy industry, such as shale oil, which has supported the US economy, and we hope to reduce crude oil prices by reducing production.

Crude oil prices have plummeted due to the drop in demand due to the spread of the new coronavirus infection and the cutoff of cooperative production by OPEC and Russia and other sources. In the New York futures market, one barrel = $ 20 for the first time in about 18 years I was interrupted.

The shale oil industry in the United States, mainly in southern Texas, is said to be the profitable line at around $ 50 per barrel, and the sharp decline in oil prices has led to a sudden deterioration in the management of each company.

President Trump reduced production through consultations with oil-producing countries other than the United States, as related firms were forced into bankruptcy for the first time this month, and if oil prices continue to slump, such bankruptcies could continue. That has led to a surge in crude oil prices.

In the U.S., the spread of the new coronavirus has seriously affected corporate activities, but President Trump has said that the energy industry, which has been supporting the economy, will fall into election in the fall to re-election. It is thought to be affected.