Historic cuts in oil production “won’t stop the fall in demand” | Business

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The most ambitious oil production cuts in history will not keep world oil prices afloat in the months to come, as the coronavirus continues to wreak havoc, investors said.

Oil prices began to fall hours after the world’s largest producers agreed to cut production to record levels, fearing that the plan to consolidate the world market would not be enough.

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Despite the plans of the Opec oil cartel and its allies to withhold about 10% of world supplies, or nearly 10 million barrels per day, Brent crude prices fell to just over $ 30 a barrel on Monday morning.

Oil prices stabilized at just under $ 32 a barrel in the afternoon, but remained well below the $ 36 bar reached earlier this month in anticipation of the deal. The oil market started the year at $ 65 a barrel.

The rare global cooperation pact concluded over the Easter weekend has been supported by G20 countries outside the Opec + alliance, including the United States, Canada and Norway. Saudi Energy Minister Prince Abdulaziz bin Salman told reporters that the deal would help deepen Opec + production cuts to around 19.5 million barrels of oil per day in total.

He said G20 nations plan to cut about 3.7 million barrels of oil a day from global production. At the same time, the Internal Energy Agency has agreed to buy 200 million barrels of oil over the next few months, which will be kept in a strategic reserve.

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