The oil producers group, known as OPEC +, including Saudi Arabia and Russia, is expected to agree to cut production at the meeting scheduled for Thursday.
As fuel demand has dropped by about 30%, members of the Organization of the Petroleum Exporting Countries and their allies, including Russia want to restrain the supply. However, they also want other producers, such as the US, to join this.
The US said OPEC did not ask US oil producers to cut their production to support global prices affected by the coronavirus pandemic, US oil production has already declined automatically!
The drop in price and demand became a major challenge for the US economy, which became the world’s largest oil and gas producer. Because the drilling industry, once very active and crowded, is threatened by layoffs and bankruptcies. Many US drilling companies have lost nearly two-thirds of their value so far this year due to the drop in oil prices.
After weeks of supply and price war, the Organization of the Petroleum Exporting Countries and its allies known as OPEC +, including Russia started talking about reducing production in last week. However, the participation of other non-OPEC countries, especially the United States, is requested.
It is said that the discussions on reconciliation among OPEC + members started with the US calling on Riyadh and Moscow to make a deal with a series of phone calls.
However, the US did not compromise last week and said it did not accept production cuts in the USA. Because any decisions coordinated by the US oil producers to reduce production in order to increase prices violate antitrust laws.