OPEC+ urges 'full conformity' with production cuts, and Saudi Arabia's energy minister warns market gamblers will be hurt 'like hell'
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The Organization of Petroleum Exporting Countries and its allies urged "full conformity" with oil production cuts at its online meeting held on Thursday. In a separate news conference, Saudi Arabia's energy minister warned that those traders who wish to short the oil market would be hurt "like hell." Saudi's Prince Abdulaziz said OPEC+ could hold an extraordinary meeting in October if oil demand worsens. "With the formerly noncompliant countries likely reducing their production and current prices being too low to support growth in the US, oil supply is likely to stay under control," a commodity analyst at UBS said. Visit Business Insider's homepage for more stories.
OPEC+ emphasized on sustaining "full conformity" with oil production cuts at its Thursday meeting, which was held to review compliance targets. On the same day, Saudi Arabia's energy minister warned traders against heavily betting in the oil market, promising that those who gamble on prices will be hurt "like hell." "Anyone who thinks they will get a word from me on what we will do next, is absolutely living in a La La Land... I'm going to make sure whoever gambles on this market will be ouching like hell," OPEC's most influential minister, Prince Abdulaziz, said at a news conference, when he was asked about the organization's next steps. He said that the OPEC+ could hold an uncustomary meeting in October if oil demand worsens and COVID-19 cases increase substantially. The world's largest crude exporters discussed continued flexibility on production cuts and made no changes to the current output reduction of 7.7 million barrels per day until December, or around 8% of global demand. Analysts had not expected any additional output cuts at Thursday's meeting. Read More: Goldman Sachs says oil prices are set to move 'meaningfully higher' into next year. Here are 7 reasons why the firm is bullish, and 5 stocks it recommends buying in advance The Joint Ministerial Monitoring Committee "observed that the recovery has not been even across the world and an increase in COVID-19 cases has appeared in some countries," an OPEC statement read. "In the current environment, the JMMC emphasized the importance of being pro-active and pre-emptive and recommended that participating countries should be willing to take further necessary measures when needed." Oil prices have risen about 11% in the last week following a drawdown in US crude and gasoline inventories, and as Hurricane Sally forced one-fifth of US offshore production to shut. International benchmark Brent crude rose 0.5%, to $43, and US benchmark West Texas Intermediate rose 0.6%, to $41, on Friday. "With the formerly noncompliant countries likely reducing their production and current prices being too low to support growth in the US, oil supply is likely to stay under control," said Giovanni Staunovo, a commodity analyst at UBS. "Should oil demand continue to recover gradually as we expect, the oil market is likely to stay undersupplied," he said. UBS predicts the price of Brent to rise to $45 per barrel in the fourth-quarter this year, and hit $55 per barrel by mid-2021. Read More: 3 top investing executives lay out the biggest risks to markets heading into a volatile election season — and share their best recommendations for navigating what happens nextSEE ALSO: The Bank of England warns of an 'unusually uncertain' outlook, and policymakers are keeping negative interest rates on the table Join the conversation about this story » NOW WATCH: Epidemiologists debunk 13 coronavirus myths
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World energy watchdog forecast comes amid global attempt to contain Covid-19Coronavirus – latest updatesSee all our...World energy watchdog forecast comes amid global attempt to contain Covid-19Coronavirus – latest updatesSee all our coronavirus coverageGlobal oil prices have slumped as traders fear plans for the biggest production cuts in history will fail to offset the deepest fall in demand in 25 years.US oil prices tumbled to 18-year lows of $19.20 a barrel on Wednesday morning and the benchmark price for Brent crude dropped by 5% to $28 a barrel amid gloomy forecasts for demand during the coronavirus pandemic. Continue reading...
The multiweek oil-price war between Russia and its OPEC allies was finally resolved on Sunday as...The multiweek oil-price war between Russia and its OPEC allies was finally resolved on Sunday as the international consortium agreed to cut global crude oil production by almost 10%. OPEC+ announced it will slash production by 9.7 million barrels a day for May and June. That's more than four times the cuts approved during the last financial crisis. WTI crude oil climbed 6.5% to $24.32 a barrel at 9:15 p.m. in New York, while Brent crude increased 3.7% to $33 a barrel. Watch oil trade live on Markets Insider. The multiweek oil-price war between Russia and its OPEC allies has finally been resolved. The international consortium agreed on Sunday to cut global crude oil production by almost 10%. OPEC+ announced it will slash production by 9.7 million barrels a day for May and June, roughly in line with the 10 million figure that was floated late last week. WTI crude oil climbed 6.5% to $24.32 a barrel at 9:15 p.m. in New York. Futures surged as much as 9% shortly after opening at 6 p.m., but quickly reversed course and traded as much as 4% lower for a stretch. Brent crude rose 3.7% to $33 a barrel. The historic accord comes after four days of tough negotiations. It also marks the biggest oil-production cut on record, coming in at more than four times what was approved during the last financial crisis. Read more: Goldman Sachs says buy these 12 stocks set to deliver market-beating sales growth as coronavirus crushes businesses Also as part of the agreement the US, Brazil, and Canada will contribute an additional 3.7 million barrels on paper amid a production decline, while other Group of 20 nations will offer 1.3 million, Bloomberg reported. Further, production cuts will persist beyond the initial two-month period, albeit at a tapered pace. After June, it will be decreased to 7.7 million barrels a day through year-end. Then it will be cut again to 5.8 daily barrels from the start of 2021 through April 2022. The deal goes into effect on May 1. The agreement marks the end of a price war between Russia and primarily Saudi Arabia that transpired at a time when the global coronavirus outbreak was already sapping demand for oil. By threatening to boost production and flood the market with cheap oil, the warring sides pushed prices for WTI crude prices down as much as 67% year-to-date. The commodity plunged more than 50% in March alone. President Donald Trump tweeted about the deal on Sunday. "The big Oil Deal with OPEC Plus is done," he said. "This will save hundreds of thousands of energy jobs in the United States." Trump continued: "I would like to thank and congratulate President Putin of Russia and King Salman of Saudi Arabia. I just spoke to them from the Oval Office. Great deal for all!" Read more: 'Don't be stupid right now': The legendary author of 'Rich Dad, Poor Dad' breaks down why a coronavirus-led depression is inevitable — and shares the 3 investments he's making to stay safeJoin the conversation about this story » NOW WATCH: A big-money investor in juggernauts like Facebook and Netflix breaks down the '3rd wave' firms that are leading the next round of tech disruption
A meeting of oil ministers is trying to agree to cuts in output as the coronavirus...A meeting of oil ministers is trying to agree to cuts in output as the coronavirus outbreak slows economic activity.