The Big Deal to Cut Oil Production May Not Be Big Enough
HOUSTON — The agreement by major oil producers on Sunday to reduce their daily production by 9.7 million barrels was the largest cutback in history and a feat of remarkable coordination by more than 20 nations led by Saudi Arabia and Russia with unusual mediation from the United States.
But it probably still won’t be enough.
Demand for oil has tumbled in recent weeks as the coronavirus pandemic has crippled global commerce and eliminated untold numbers of commutes, plane trips and cargo shipments. Experts estimate that demand has fallen by somewhere between 25 million barrels and 35 million barrels a day — or up to three and a half times as much as what the oil nations are promising to cut.
News of the deal briefly lifted oil prices on Monday, but those gains faded over the …continued .
[Source: New York Times]