OPEC members are considering oil-production cuts ahead of schedule in order to backstop plunging prices, new report says
Some OPEC members are considering cutting oil production right away instead of waiting until a historic deal begins next month, The Wall Street Journal reported Monday, citing sources familiar with the matter. The proposal comes after oil prices fell to record lows, trading below zero for the first time in history as demand craters due to the coronavirus pandemic. Saudi Arabia could begin cutting production immediately under a proposal being considered, according to the report. Watch oil trade live on Markets Insider.
Saudi Arabia and other OPEC members are considering cutting oil production earlier than next month, The Wall Street Journal reported Monday, citing sources familiar with the matter. On Monday, oil prices plunged below zero for the first time in history and traded as low as -$40 per barrel, prompting the kingdom to consider lowering production as soon as possible, instead of waiting until next month when the agreement between Saudi Arabia and Russia is set to begin, according to the report. Just over a week ago, OPEC agreed on historic production cuts set to begin in May, ending a price war that had erupted between Saudi Arabia and Russia. The threat of production being increased to record levels weighed on prices as the coronavirus pandemic tanked global demand for oil. Read more: The price of US crude oil just went negative for the first time. Here's what that really means and why it's not free to fill up your car. Saudia Arabia could begin cutting production immediately under a proposal being considered, if it aligns with the kingdom's legal obligations and agreed upon deliveries, according to The Journal. The proposal could be applied to other OPEC countries, the report said. Oil fell into negative territory to a record low Monday as traders worried about a supply glut, and sellers looked to offload extra barrels, effectively paying people to take it off their hands. Prices were also weighed down by futures contracts expiring Tuesday, sending oil lower as traders exited the positions. If concerns about storage continue as demand remains low, oil prices could see further volatility. Read more: Experts at Boyar Research lay out the Warren Buffett-inspired investing approach that's helped them crush the market over 7 years — and offer 4 stock picks for a coronavirus-battered marketJoin the conversation about this story » NOW WATCH: What makes 'Parasite' so shocking is the twist that happens in a 10-minute sequence
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