Mexico maintains opposition to OPEC+ cuts deal - Reuters

Citing sources familiar with the OPEC and non-OPEC producers (OPEC+) talks, Reuters reports that Mexico maintains opposition on the output cuts deal before initially agreeing to it.

The OPEC+ sources said: Mexico initially agreed to the cut and the coalition was on the verge of finalizing the deal “but Mexico is not happy with it a new quota of 1.353 million b/d, as the country plans to unveil a $13.5 billion energy investment package to help state oil company Pemex raise its production to 2 million b/d by the end of the year.”

S&P Global Platts, is a provider of energy and commodities information, meanwhile added,” the coalition could try to convince Mexico again Friday at a G20 energy ministerial. With Mexico, not the only country needing convincing, the G20 summit promises to be another test of geopolitical wills.”

In light of Mexico’s rejection to the deal, the OPEC+ issued a statement, citing “there will be no output cut unless Mexico joins.” 10 mln barrel/day cut is conditional on Mexico joining.

According to a text of the agreement seen by Platts, the following is the proposed deal –

“10 million b/d OPEC+ cut for May and June then scale it back to 8 million b/d for the rest of 2020. Then down to 6 million b/d for all of 2021 through April 22.”

Oil price reaction

On the above news, oil prices extended the overnight downslide, with WTI downed to a new five-day low of 22.60. At the time of writing, WTI trades at 23.21, still down 7.50% on a daily basis.