At the OPEC meeting on April 9, we will talk about the ratio between countries of production cuts to production volumes, Artem Deev, head of the analytical Department of AMarkets, on Twitter.
On the eve of April 6, US President Donald trump did not rule out that the US could reduce oil production after OPEC.
“Saudi Arabia, which has significantly increased production, is in the best position, they will just return to the volumes that were before March this year,” Deev said.
According to him, Russia will not be able to afford to reduce production by more than 1 million barrels per day, because this is 20% of the volume that the country supplies to foreign markets.
“A bigger reduction is simply impossible, the Russian Federation will lose not only market share, but also revenue, which will become a very serious problem for the budget against the background of the epidemic,” the expert added.
In his opinion, even with the participation of the US in the deal, it will not be possible to completely remove excess oil from the market, because the supply is too much higher than the demand in global terms. Thus, OPEC solutions will remove only part of the problems.
In turn, Maxim Chekushin, a senior personal broker at BKS Broker, told Izvestia that it is either very difficult and expensive to reduce 10-15 million barrels per day, or impossible at all, so the production reduction may take place in a smaller volume.
“US energy Secretary Dan Brouillette says that the US is calling on Russia and Saudi Arabia to reduce production, but the US has a market economy so they do not need to enter into a deal, the market will regulate itself, and production will reduce itself. There are also many statements from the Kremlin that the parties are “close to a deal”, and then there is always the addition that Russia wants all major oil-producing countries to participate in it. All Express interest in stabilizing the oil market, but the positions of the parties are still far from unity, and the key issue is the participation of the United States in the deal, ” Chekushin said.
He noted that while all statements indicate that the US is not ready to enter into a deal, it is also worth Recalling the first OPEC deal a few years ago. Then the United States was also offered to participate in the agreement, but they refused. However, the expert admits that before the OPEC meeting on April 9, the us position may change.
On April 3, the media reported on the preparation of an unscheduled OPEC meeting on the initiative of Saudi Arabia. The meeting was scheduled to take place on April 6, but was postponed to April 9. On April 7, Russia confirmed its participation in the event.