The g-20’s efforts to stabilize the oil market

Le G20 se mobilise pour stabiliser le marché du pétrole

Photo: Haidar Mohammed, Agence France-Presse
Then they went still around US $60 a few months ago, the price per barrel reached at the beginning of last week, levels not seen since 2002. The price of a barrel according to the basket of OPEC is just above US $21.

The Energy ministers of the G20 “have not discussed figures” regarding a possible reduction of the world oil supply at the meeting organised on Friday by saudi Arabia, the world’s leading exporter of black gold, said the representative of Canada, Seamus O’regan.

“The discussions today have focused on a multilateral solution to resolve the instability in prices.” “We have not discussed figures, it was not about numbers,” said Mr O’regan, canadian minister of natural Resources, during a press call at the end of the meeting. “At this stage, it was really to discuss a policy and a collective commitment to use all the tools available to improve the stability. We have created a working group that will report on elements of a response co-ordinated “, he said.

This group should meet ” soon “, he said.

It was called “success” of the meeting by videoconference from the simple fact that it took place, adding that ” the G20 countries truly share an understanding according to which the economic security and prosperity of our peoples is related to an energy market which works well and [is] stable “. “The fact […] that we are willing to work together to coordinate immediately our efforts, collect data to know how to find this stability marks a great step forward. We are not yet where we want to be, but it is definitely a step in the right direction “, he estimated.

Canada, he reminded us, ” is the world’s fourth largest producer of oil, which represents 8 % of its GDP “. The country, which has the third-largest reserve of the planet, has already, according to him, reduces its production of about 750,000 barrels per day ” in recent months, with the price collapse caused by the pandemic of novel coronavirus.

Decrease of the offer

In a press release Friday morning, the Organization of the petroleum exporting countries (OPEC) has referred to a prior agreement on a reduction of the global supply — 10 million barrels of crude oil per day (mbd) in may and June. It was obtained during a meeting which ended in the early morning of a key oil-producing countries, including Russia, non-member of the cartel and the second world producer and leader of the partners in the cartel.

But Mexico, a country which is not a member of OPEC, has not given its approval, necessary to ratify the agreement at this meeting. Mexico was indeed excessive effort, which it was claimed (reduction of production of 400 000 barrels per day), compared to other countries. A few hours later, the president of mexico, Andrés Manuel Lopez Obrador, indicated that it had reached an agreement with his american counterpart, Donald Trump, to reduce the oil production in his country.

He stated that Mexico would reduce its pumping of 100,000 barrels per day (bj) and that the United States would, on their side, reducing their 250 000 bj additional compared to their previous commitments to compensate for the part mexican.

Mr. Trump has confirmed that the United States had agreed to help Mexico to reach its quota of reduction of oil production.

The withdrawal of 10 mbd in may and June, and then 8 mbd from July to December, would be mainly supported by saudi Arabia and Russia, but at least a dozen other countries are expected to participate in the effort, according to the agency Bloomberg.

Then they went still around US $60 a few months ago, the price per barrel reached at the beginning of last week, levels not seen since 2002. The price of a barrel according to the basket of OPEC is just above US $21.

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