Oil prices plunged over $1 a barrel Monday after major producers finally agreed on their biggest-ever output cut; however, gains had been capped amid concern that it won’t be sufficient to head off a supply glut with the coronavirus pandemic denting demand.
After four days of wrangling OPEC+, agreed Sunday to reduce production by 9.7 million barrels per day (BPD) to assist oil prices, sources stated, representing around 10% of global supply.
Total global oil supply reductions could come to 20 million barrels per day, nearly 20% of global supply, Kuwait’s oil minister stated.
Brent crude LCOc1 futures surged 3.9%, to $32.71 a barrel after opening at a session excessive of $33.99. U.S. West Texas Intermediate (WTI) crude futures had been up (6.1%), to $24.15 a barrel, after hitting a high of $24.74.
Leaders of the world’s top three oil producers, Russian Prez Vladimir Putin, U.S. President Donald Trump, and Saudi Arabia’s King Salman, all welcomed the OPEC+ deal to reduce global crude production, the Kremlin stated Sunday.
Saudi Arabia, Kuwait and the United Arab Emirates (UAE) volunteered to make cuts even deeper than those agreed, which would successfully bring the OPEC+ supply down by 12.5 million BPD from current supply ranges, the Saudi energy minister stated.