Wed | May 27, 2020

Oil-producing nations seek global deal to stabilise market

Published:Thursday | April 9, 2020 | 1:31 PM
The sun sets behind an idle pump jack near Karnes City, Texas, Wednesday, April 8, 2020. (AP Photo/Eric Gay)

MOSCOW (AP) — Oil-producing countries including those of the OPEC cartel and Russia are trying to strike a global deal to pump less crude in a bid to limit a crash in prices that, while welcome for consumers, has been straining government budgets and pushed energy companies toward bankruptcy.

Thursday’s video conference is part of a series of talks on stabilising the market, where oil prices have more than halved since the start of the year amid a pricing war between Saudi Arabia and Russia.

The drop was intensified when the coronavirus pandemic caused a further plunge in the demand for oil as travel and business ground to a halt globally.

Kremlin spokesman Dmitry Peskov said Thursday that Russia will advocate for a global move that not only includes OPEC and Russia, which had coordinated production cuts for four years until they fell out spectacularly this year, but also the United States.

The US is the world’s top producer now and the slide in crude prices is causing huge financial damage to companies in the oil patch.

Expectations are high.

President Donald Trump has said that output could be cut by as much as 15 million barrels a day, or about 15% of global production, though experts say that is unlikely. Last week, President Vladimir Putin said he supported an overall cut of about 10 million barrels a day.

International benchmark Brent crude traded Thursday over $34 a barrel as the US benchmark West Texas crude traded under $27.

That is just over 50% lower than at the start of the year.

At one point, prices were down about 60%.

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