OPEC (Organization of the Petroleum Exporting Countries) is attempting to stabilize the volatile oil and gas market.
In combination with efforts by the G20 and International Energy Agency, OPEC’s new deal could result in a reduction of up to 20 million barrels of oil per day (bpd) from circulation, therefore decreasing excess stockpiles and helping to drive up prices.
OPEC’s deal, supplemented by the as-yet-undefined efforts of the G20, could be the beginning of restoring normality to the market.
The American Petroleum Institute (API) welcomes the latest OPEC agreement to cut global oil production:
“This is a significant agreement that will foster increased stability in energy markets to the benefit of both American energy consumers and producers,” API President and CEO Mike Sommers said in a statement on the organization’s website.“We commend the president’s leadership and his administration’s diplomatic engagement to urge nations to bring global oil supply in line with the lower energy demand as a result of the pandemic,” he added.
In the statement, Sommers outlined that “significant challenges” remain in the weeks and months ahead for the sector, “and nearly every other”, but added that U.S. oil and natural gas – and the American workers who produce, transport, service, refine and ship it – “will be critical to enabling our economic recovery.”