Negotiations got bogged down when Mexico refused to back an agreement reached by Russia and Saudi Arabia, saying it would cut only 100,000 barrels per day, not 400,000 barrels. Saudi Arabia strongly opposed Mexico`s position and feared that if Mexico could hold the others, it would follow. Trump met Friday with oil industry leaders and promised to revive the U.S. energy sector. “There will be some companies that won`t survive,” said Trent Latshaw, president of Latshaw Drilling, an oil service provider operating in Texas and Oklahoma. “But the industry in general will survive and come out stronger. We`re going to make tough decisions, we need to innovate, and that`s why we`re getting smarter. The group will also hold monthly meetings to approve further adjustments. “When prices go up, there is a strong desire to curb supply,” says Bhushan Bahree, executive director at IHS Markit, a research firm. OPEC could “throw the goods on a lifeline and even create land if a valid agreement is reached on Monday,” Lukman told MarketWatch. “Such collaboration and teamwork could bring the supply level closer to the anaemic demand that is accompanied by a global recession.” An oil price war between Saudi Arabia and Russia began in early March, when the Organization of Petroleum Exporting Countries, along with its leading oil maker Saudi Arabia and allied oil producers, led by Russia, failed to reach an agreement to cut production. Trump backed President Andrés Manuel Lepez Obrador by vaguely promising that he would balance the difference and helping the Saudis and Russians not abandon the interim agreement. Saudi Arabia and Russia have agreed on the principle of a reduction in oil production, the Wall Street Journal reported on Thursday.
The Organization of Petroleum Exporting Countries is holding a virtual meeting with its allies, including Russia, with the goal of balancing the oil market, which has suffered from a drop in demand linked to efforts to stop the spread of COVID-19, and a price war between Moscow and Riyadh, which has submerged the world with crude oil. Under the agreement in principle, Saudi Arabia would withdraw 4 million barrels per day from production in April, while non-OPEC Russia would cut 2 million barrels per day, the Wall Street Journal reported. Iraq and other major OPEC oil exporting nations have not yet agreed on concrete cuts to oil production. May West Texas intermediate oil clk20 rose $1.02, or 4.1 percent, to $26.11 a barrel. June Brent crude uk:brnm20 rose 70 cents or 2.1% to $33.54. Read:Trump vows U.S. energy sector will come back as he sees Russia-Saudi oil agreement Saudi Arabia will apply its reduction to a production level of about 11 million barrels a day, a delegate said. This is less than the most recent production levels, which increased by more than 12 million per day at the beginning of April. He thinks that oil prices will remain low, even if OPEC reduces production because “whatever they cut, they can`t sell anyway,” given the “massive” drop in oil demand. The plan by OPEC, Russia and other allied producers of a group called OPEC Plus will eliminate 9.7 million barrels per day in May and June, or nearly 10% of world production.