Trading

Mexico refuses to extend cut in oil production

Mexico has refused to extend a cut in oil production (output) to the end of July which was agreed by OPEC members and other key producers.

Energy Minister, Rocio Nahle, made this known during a visit to a petrochemical plant in Veracruz state.

There are other countries that extended the cuts to July. We told them no, that we are maintaining the agreement signed in April. There is no problem,” she said.

She said Mexico “fully respected” the original agreement, under which it agreed to cut production by 100,000 barrels a day in May and June, but other countries “did not respect it,” without specifying which ones.

The minister said Mexico had made its position known to its partners before the start of negotiations on Friday morning.

Under the terms of the April agreement, OPEC and the so-called OPEC+ pledged to cut output by 9.7 million barrels per day (bpd) from May 1 until the end of June.

The cuts were then to be gradually eased from July, to 7.7 million bpd until December.

Algerian Oil Minister Mohamed Arkab, who currently holds OPEC’s rotating presidency, told AFP that the agreed cut for July was 9.6 mbpd, just slightly below the 9.7 mbpd for May and June.

Crude prices have plummeted over falling demand as countries around the world have imposed strict lockdowns to stop the spread of the new coronavirus.

Oil provides a fifth of Mexico’s export earnings and its state-owned petroleum firm Pemex is in serious trouble, posting a net loss of $23.5 billion in the first quarter.

Source: Voice of Nigeria