Oil prices fell 5% this Tuesday despite the hope that finally the world's largest oil producers will agree to cut production to face the impact of the pandemic on demand. The OPEC + meeting, which was scheduled for Monday, now it looks like it will be held on thursday. The main oil producers, including Saudi Arabia and Russia, are expected to agree to cut production at this meeting, although the United States is also expected to contribute its part in this cut.
"Oil producers they have to cut deeply and quickly if they want to avoid the total saturation of the markets, "said Eurasia Group, according to Reuters.
World oil demand has fallen by as much as 30%, or about 30 million barrels a day, coinciding with the price war between Saudi Arabia and Russia that has led to flooding markets with extra supply after they were unable to reach an agreement early last month.
The Organization of the Petroleum Exporting Countries (OPEC) and other producers, including Russia, have been reducing production in recent years amid a rapid expansion of US production which made the country the largest producer of crude oil in the world. There is now doubt as to whether the United States will join any coordinated action.
The American President, Donald trumpOPEC said on Monday had not asked him to put pressure on national oil producers so that they reduced their production to prop up prices. He also noted that US production is declining in response to falling prices.
"I think it is happening automatically, but no one has asked me that question yetso we'll see what happens, "the president declared at a press conference on Monday afternoon.
Coordinated action by US oil producers to reduce production would be a violation of antitrust laws.
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