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IPFS News Link • Oil

Crude Crashes Over 10% After OPEC+ Meeting Delays

• https://www.zerohedge.com, by Tyler Durden

As Ransquawk details, an OPEC+ call that was scheduled for Monday has been delayed until Thursday, amid an intensifying dispute between Russia and Saudi Arabia over who is to blame for falling crude prices. Participants are to discuss the demand hit to crude from COVID-19. Analysts do not seem to be convinced that the group will make sufficient progress; the Saudis and Russia have called for other global producers – namely US, Canada and Mexico – to share the burden of cuts, while Norway has also said it would consider cutting production in any coordinated global effort.

LEVEL OF CUTS: Ahead of the now notorious March OPEC meeting, there was a recommendation to cut an additional 1.5mln BPD from April 2020 through the end of 2020, with a review in June. The deal was conditional on support from OPEC+, and OPEC said any deal could only be applied on a pro-rata basis, and proposed core members cut by 1mln BPD, and non-OPEC by 500k. Ahead of Thursday's meeting, a figure of 10mln BPD cut to output has been floated (around 10% of global supply), although following a call with Saudi Arabia, US President Trump last week indicated that it could be as much as 15mln BPD. A source has suggested that the 10mln should be slashed from current levels of output. Either way, Goldman Sachs thinks that the demand hit might actually be more like 26mln BPD, and a cut of 10mln BPD may prove to be insufficient.

TEXAS: The Trump administration has previously signalled it would not impose mandatory curbs on companies' production, given the antitrust legislation, although Stratfor's analysts note that Texas, where field production was running at a pace of 5.37mln BPD at the end of 2019, does have the legal framework to be able do so at a state level. One of the three Texas Railroad Commission members, Ryan Sitton, has indicated a willingness to agree production cuts to support oil prices and prevent producers in the state going bust. Texas regulators are to meet on 14th April to discuss production curbs in the state, and may vote on any resolution a week later, Reuters reported. Sitton, however, is a lame duck on the Commission, having lost in the March primary to a challenger, and his term concludes in December; the state's two other regulators, Wayne Christian and Christi Craddick, have not publicly endorsed cuts. 


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