a Meeting of energy Ministers of"big twenty" (G20) concluded without extension of the scope of the two-year plan for the reduction of oil production agreed with OPEC and its partners a day earlier.
Instead, the G20 plans to form a task force to help OPEC members and countries outside of OPEC, collectively known as OPEC +, to track the reduction of oil production and to take action to balance the market by countries that are not formally committed to the production cuts.
the Creation of a "short-term focus group" is the only concrete achievement of the negotiating parties, which members of OPEC and their allies, committing to reduce production, hoping to use to obtain assurances similar measures by other producers.
the Task force on monitoring will be open to participation by all G20 members, on a voluntary basis and will report their assessments of the ministries of energy, while Saudi Arabia is chairing the G20 this year. The representative of the OPEC + outside the G20 stated that the task force can function as a mechanism of joint monitoring of the market, which monitors compliance with agreements on the reduction of production, OPEC + in 2016-2020.
But oil producers outside of OPEC Alliance + refused to participate in coordinated cuts in production at the G20 meeting. Instead, they assured OPEC that the expected reduction in their production, plans to increase the excess supply in the strategic petroleum reserves (SPR) and measures to increase demand for oil through economic incentives will help to stabilize markets.
on the Eve of nearly all the OPEC countries+ including Russia and Saudi Arabia, agreed on a reduction of about 20% of its own production (collectively 10 million barrels per day, b/C) for two months. Then it was supposed to reduce the amount of the reduction in production to 8 million b/d before the end of 2020 and to 6 million b/d until April 2021. The purpose of the agreement was the elimination of the consequences of the decline in demand for oil due to the coronavirus that almost led to the filling of all the world's stores of oil.
neither the United States Nor Canada has not offered any commitments to reduce production, partly because the national governments do not have clear legal authority to determine such reductions. Instead, the two countries are promoting a predictable decline with the reduction in budgets for drilling by private companies and, probably, the cessation of production as reduced demand for fuel.
President of the United States Donald trump suddenly offered to support the proposal of his Mexican colleagues of andrés Manuel lópez Obrador that the United States to help Mexico to make the balance of the reduction, for the group of OPEC +. Mexico, on the proposal of lópez Obrador promises to cut down only 100,000 barrels a day, and the rest of the United States. According to trump, the US will cut 250,000 barrels per day, to help make a deal OPEC +, "we already did" - an obvious variant of the arguments of his administration about the decline of production.
Thus, formally, at the moment, even the deal OPEC+ is not fully coordinated.
At the same time, the refusal of non-OPEC countries by reducing the production may lead to another decline in oil prices, as has already warned this week analysts at UBS and Goldman Sachs. While the market did not react to the results of the meeting of Ministers of G20 countries, as major Western markets are closed due to celebration of good Friday.
