10:25 - 13.04.2020

---

April 13, Fineko/abc.az. Oil prices have grown on Monday by 4-5%, after OPEC+ countries managed to come to an agreement on the reduction of global oil production by about 13%.

The Ministry of Energy reports that Azerbaijan has acceded the new OPEC+ deal on the oil production cuts.

"Following a videoconference held on 12 April, the OPEC+ ministers reached an agreement on the reduction of the oil production from 1 May for the May-June 2020 period by 9.7 million b/s. Azerbaijan also supported this decision. Energy Minister Parviz Shahbazov highly appreciated the position of oil-producing countries aimed at stabilizing the oil market," the Azerbaijani Ministry said in a statement.

The price of June’s Brent crude futures on the London ICE Futures Exchange rose by $1.32 (4.19%) up to $32.80 per barrel on Monday by 8:55 am. During the session the price growth reached 8%.

WTI futures for May on the New York Mercantile Exchange (NYMEX) rose in price by this time by $1.08 (4.75%) up to $23.84 per barrel.

A key obstacle for reaching a final agreement was the position of Mexico, which did not want to undertake proportionally the same commitments as 22 other oil-producing states.

In turn, Saudi Arabia considered it unacceptable that any of the countries would not fully comply with the collective obligations undertaken by OPEC+.

Nevertheless, a forced compromise was reached, and OPEC+ countries agreed to cut oil production for May-June by 9.7 million bpd. On Thursday, the figure of 10 million bpd was called, which also took into account the contribution of Mexico.

The U.S., Brazil and Canada will add an estimated 3.7 million barrels to the decline due to a drop in production caused by lower prices.