Search ForexCrunch

Citing sources familiar with the OPEC and non-OPEC producers (OPEC+) talks, Reuters reports that Mexico maintains opposition on the output cuts deal before initially agreeing to it.

The OPEC+ sources said: Mexico initially agreed to the cut and the coalition was on the verge of finalizing the deal “but Mexico is not happy with it a new quota of 1.353 million b/d, as the country plans to unveil a $13.5 billion energy investment package to help state oil company Pemex raise its production to 2 million b/d by the end of the year.”

S&P Global Platts, is a provider of energy and commodities information, meanwhile added,” the coalition could try to convince Mexico again Friday at a G20 energy ministerial. With Mexico, not the only country needing convincing, the G20 summit promises to be another test of geopolitical wills.”

According to a text of the agreement seen by Platts, the following is the proposed deal –

“10 million b/d OPEC+ cut for May and June then scale it back to 8 million b/d for the rest of 2020. Then down to 6 million b/d for all of 2021 through April 22.”

Oil price reaction

On the above news, oil prices extended the overnight downslide, with WTI downed to a new five-day low of 22.60. At the time of writing, WTI trades at 23.21, still down 7.50% on a daily basis.