The world’s top oil producers (called the OPEC+ Alliance) pulled off a unprecedented deal to cut global output by nearly 10%. The deal is likely not enough to offset the impact of the COVID-19 pandemic.
- OPEC+ will cut 9.7 million barrels a day.
- Prior to this historic cut, OPEC’s single largest cut was in December 2008: 2.2 million barrels a day, according to IHS data.
- Other nations, including the U.S., Norway and Canada also announce supply cuts.
The decline in global oil demand this month alone — 25 million barrels a day — is roughly seven times larger than the biggest decline after the 2008 economic crash, according to data by IHS Markit. Demand is down roughly 22% YOY.
Oil prices are hovering near 20 year lows, with U.S. prices (WTI) closer to $25 and International based Brent around $30. Year to Date, national gasoline prices have fallen from $2.60/ gallon to $1.86/ gallon while sub $1/ gallon gas is now being found in Kentucky, Ohio, Oklahoma and Texas.
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