20 million BPD cut sounds about right for Trump

20 million BPD cut sounds about right for Trump

Yesterday President Trump went online and dismissed the already agreed OPEC+ cut. According to his tweet afterwards, the negotiated cut is greater than the one announced.

The deal made over the weekend puts an end to a price-war between Saudi Arabia and Russia. After making the prices drop by oversaturation, OPEC+ members decided to cut the production quota to 9.7 million barrels per day.

But the agreement isn't what it seems to be, as President Donald Trump announced in a tweet. The cut could be much bigger than the already announced one: "having been involved in the negotiations, to put it mildly, the number that OPEC+ is looking to cut is 20 Million Barrels a day, not the 10 Million that is generally being reported. If anything near this happens, and the World gets back to business from the COVID-19 disaster, the Energy Industry will be strong again.” He thanked Saudi Arabia and Russia for making it happen.

Prince Abdulaziz bin Salman stated that the G20 would cut approximately 3.7 million barrels per day, and the strategic reserves purchases will be around 200 million barrels in the next couple of months. Overall, the reduction will be circa 19.5 million BPD.

The 20 million cut is closer to the one that experts said is required to counterbalance the market.

After Trump’s tweet, Oil prices boosted with Brent Oil going up 1% to $31.85 per barrel. Oil went up 3.7% to $23.60 per barrel.


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Sources: reuters.com, forexfactory.com, marketwatch.com, Bloomberg.com

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Users/readers should not rely solely on the information presented herewith and should do their own research/analysis by also reading the actual underlying research. The content herewith is generic and does not take into consideration individual personal circumstances, investment experience or current financial situation.

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