His role as a “Dealmaker” is the US President Donald Trump once more. After had gone through the negotiations on a reduction in subsidies by the Opec and Russia for days hung up, turn up Trump repeatedly in the discussions and encouraged the participants on Sunday, finally, to an agreement.
Oil demand could rise by 36 percent
a break-in Accordingly, “Opec+”countries, including Russia, your promotion will reduce by a total of 9.7 million barrels per day starting in may. This is the largest reduction that has ever been decided. After the price of Oil was initially shot to the top, he fell, however, and approaches, with rates of $ 22 per Barrel for the US WTI to the attention of the 18-year-Low of just below $ 20 by the end of March 2020.
According to the commodities trader Trafigura, is likely to break due to the Corona pandemic, the global oil Demand in April to horrendous 36 million barrels per day compared to the previous year – a decline of 36 percent. Since a reduction in subsidies to 9.7 million barrels is Far from sufficient. In spite of the massive reduction in subsidies will therefore fill the world’s already pretty full stock more rapidly, which creates strong pressure on the price of Oil. db Oil price WTI 21,36 USD -3,10 (-12,67%) OTC
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Trump continues with dubious proposal
The biggest winner of the deal seems to Trump being. He fears that the job losses in Texas and other oil-rich States worsen his chances for re-election in November, which is why he’s driving now, everything is in his Power, to the price up. On Twitter, Trump celebrated He stressed that he was finally “to say the least to have been involved” in the negotiations””. It was a “great Deal” for all parties Involved. In the USA the agreement “, hundreds of thousands of Jobs save” in the energy sector.
United States with throttles for Mexico – but not
To the reduction in subsidies to a total of 9.7 million barrels per day Saudi-tax-Arabia and Russia each have around 2.5 million barrels per day, accounts for where a total of 6.1 million barrels of Opec and 3.6 million in Non-Opec countries. However, many experts doubt that Russia will cut production within just two weeks such a large amount.
After Mexico had refused for a long time, to reduce production by 400,000 barrels per day, which would have corresponded to a decline of 23 percent, as well as in all other countries, made Trump in a three-way conference with the Russian President Vladimir Putin and the Saudi energy Minister Abdulaziz bin Salman made the following proposal: Accordingly, Mexico will. the production of only 100,000 of the reactors, while the United States will contribute the rest of the 300,000
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The three-party conference agreed to the proposal, the doubt, are great, as is the Plan to finally be implemented. After all, Trump has so far refused strictly, to cut production on purpose. Rather, he has referred repeatedly to the fact that of the many Fracking companies that write deep red Numbers, cut imminent decline in production was solely due to the price slump, and their production is strong.
Saudi Arabia’s strategy fails again
The loser of the deal, however, are Saudi Arabia and Russia. Saudi Arabia could hold Trumps pressure is not long, the country is entirely dependent on the military aid the United States in the fight against Iran. Thus, the strategy of Saudi Arabia, to pump as much Oil as possible, and to flood the world market has failed, quickly. And also for Russia, the Deal is anything other than pleasing after the country is still in March, had refused to cut funding to a few hundred thousand barrels.
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Oil-price is still too low
However, Trump has won only a Pyrrhic victory. For a price of 22 dollars per Barrel is not enough for the US Fracking industry by Far, to grow profitably. According to expert estimates, the level would have to be rather more than $ 40. Therefore, Trump has tried to after the recent slump in the price of Oil once more, to talk him up.
“is The number to the Opec+ with the cuts looks, is 20 million barrels per day, not the 10 million that are being reported everywhere,” tweeted Trump. The only Problem is that the United States would have to contribute even a few million barrels, which has refused to Trump, but repeatedly. The longer he refuses, the faster the global Oil storage are full, and the faster the price of the energy carrier in the direction of the 18-year is expected to decline lows and at the end fall below finally.
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