People have been confined to their homes since mid-March, and it is being recommended to not leave unless absolutely necessary. The global measures made in response to the spread of coronavirus has had such a huge impact on the fuel economy. The oversupply has caused huge drops in the oil prices globally.
The Organization of the Petroleum Exporting Countries (OPEC) has decided that they will cut crude production by at least a tenth of the current global supply. This initiative has never been attempted to stabilize the markets.
The Russian, American, and Saudi Arabian governments have all agreed to this initiative, and they decided to cut oil production by 9.7 million barrels a day. They decided to take this initiative for two months, beginning May 1st until June 30th.
After those two months, from July through to December 2020, the cuts will continue at 7.7 million bpd, and moving to 5.8 million bpd for about 16 months after that.
Mexico has decided to for the first two months of the initiative of 100 000 barrels before making further commitment. This pact was made through a conference of 23 nations and they will have a touch up meeting in June to determine what further actions need to be made at that point.
Although Canada has shown support for the cuts, they have yet to make a statement with their cuts as of Friday. There have been suggestions about the cuts going through the provincial jurisdictions.
Originally Published on www.bandersnatch.ca Vol.49 Issue 13 on April 15th, 2020