Oil-producing nations seek global deal to stabilize market

Oil-producing countries including those of 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 videoconference is part of a series of talks on stabilizing a market, where oil prices have more than halved since start of year amid a pricing war between Saudi Arabia and Russia. drop was intensified when coronavirus pandemic caused a furr plunge in demand for oil as travel and business ground to a halt globally.

Kremlin spokesman Dmitry Peskov said Thursday that Russia will vocate for a coordinated move that t only includes OPEC and Russia, which h coordinated production cuts for four years until y fell out spectacularly this year, but also United States. U.S. is world’s top producer w and slide in crude prices is causing huge financial dam to companies in 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 Vlimir Putin said he supported an overall cut of about 10 million barrels a day.

“We are rey for agreements with partners and within framework of this mechanism - OPEC-plus — and we are rey for cooperation with United States of America on this issue,” Putin said.

“According to preliminary estimates, I think that we can talk about a reduction in volume of about 10 million barrels per day, a little less, maybe a little more,” he ded.

oil market was alrey oversupplied when Russia and OPEC failed to agree on output cuts in early March. Analysts say Russia refused to back even a moderate cut because it would have only served to help U.S. energy companies, which were pumping at full capacity. Stalling served to hurt American shale-oil producers and protect market share.

Russia’s move appeared to enr Saudi Arabia, which t only said it would t cut production on its own but said it would increase output inste and reduce its selling prices in what became effectively a global pricing war.

In time since, prices have collapsed. International benchmark Brent crude tred Thursday over $34 a barrel as U.S. benchmark West Texas crude tred under $27. That is just over 50% lower than at start of year. At one point, prices were down about 60%.

In Russia, which relies on oil as main source of income, price collapse caused ruble to crash, which in turn boosted cost of imports and sped up inflation.Russia’s Energy Ministry said Wednesday it is prepared to cut production by 1.6 million barrels a day, about 14% of its overall production, under an OPEC+ deal.

(Im Credit: AP)