Page 5 - LatAmOil Week 14 2020

LatAmOil COMMENTARY LatAmOil
 “Nigeria, like the rest of the world, has been hit by the global pandemic, COVID-19, and is pre- paredtojointherestoftheworldinmakingthe necessary sacrifices needed to stabilise the crude oil market and to prevent what is likely to be a major global economic meltdown,” Sylva was quoted as saying in a ministry statement.
“It is well known that Nigeria has always collaborated with key OPEC members such as Saudi Arabia in maintaining a balanced position that has helped to make OPEC one of the most successful global institutions in recent history,” he added. “Nigeria intends to maintain this team spirit, even as it takes into account the position of OPEC’s strategic allies, such as Russia and its allies.”
He also remarked, though, that Nigeria would assume a position that was in the best interests of its own short-term and long-term economic forecasts. Additionally, he did not make any explicit statements with respect to cut- ting output. (The West African state has joined Saudi Arabia in raising production levels since the expiration of the OPEC-plus agreement.)
“As always, the driving force of our OPEC policy is first the stability of our national econ- omy as well as the stability of the global econ- omy, which is heavily dependent on OPEC and its strategic partners, popularly referred to as OPEC-plus,” he added.
Mexico
For its part, Mexico has confirmed that it does intend to participate in the meeting in Vienna.
On April 6, representatives of Mexico’s Energy Ministry told Argus Media that the country was intending to send delegates to the talks. “As a member of OPEC-plus, Mexico will participate in the next meeting,” they stated.
They also indicated, though, that the coun- try did not have any specific expectations with respect to restrictions on production. “For the time being, we do not envisage [production
or capital expenditure cuts], but we continue to analyse the international environment and OPECdecisions,”theministryofficialssaid.
Mexico’s national oil company (NOC) Pemex has said it hopes to extract some 1.85mn bpd of crude oil in 2020. This is more than 5% below its original target figure for this year of 1.95mn bpd, but it is almost 13% above the average out- put figure of 1.64mn bpd posted for the month of February.
Brazil
Meanwhile, Brazil appears to have something different in mind. The South American country has said that it wants to discuss production pol- icy within the framework of the G20, a group of 20 states with the largest economies in the world.
On April 6, the Brazilian Ministry of Mines and Energy said it hoped to see officials from all G20 member states gather to talk about possible avenues for co-operation on market stabilisa- tion. Energy ministers from these countries can co-ordinate a joint search for mechanisms that contribute to the steadying of world oil markets, it said.
It noted that Mines and Energy Minister Bento Albuquerque had recently held “very con- structive” talks on the matter with Saudi Energy Minister Prince Abdulaziz bin Salman. “Brazil will be ready to participate in a meeting within the scope of the G20, a forum where both coun- tries have a seat,” it added.
The ministry’s statement was published shortly after Roberto Castello Branco, the head of Brazil’s national oil company (NOC) Petro- bras, described the disputes between Russia and Saudi Arabia over the OPEC-plus deal as “irrel- evant in view of the scale of this crisis.”
According to Castello Branco, another OPEC-plus deal might not be enough to fix all of the problems now affecting world oil markets. “The price of oil will stay low because the global demand for oil has fallen,” he commented.™
“ to discuss
Trump signals Russia-Saudi truce
WHAT:
Leading producers will hold talks on April 9
WHY:
The agreement is seen as vital to prevent oil prices from sliding further.
WHAT NEXT:
Brazil has suggested working through the G20 rather than OPEC.
US President Donald Trump announced on April 2 that Russia and Saudi Arabia would be cutting their production levels, instead of con- tinuing with a supply war that could result in hundreds of oil firms across the world going out of business.
“Just spoke to my friend MBS (Crown Prince) of Saudi Arabia, who spoke with Presi- dent Putin of Russia, & I expect & hope that they will be cutting back approximately 10 million barrels, and maybe substantially more which, if it happens, will be GREAT for the oil & gas industry,” Trump tweeted. “....Could be as high as 15 million barrels. Good [GREAT] news for everyone!”
Traders were encouraged by the news, with Brent surging 16% to $29.11 per barrel and West Texas Intermediate (WTI) leaping up 20% to $24.40 per barrel after Trump released his tweet.
Trump was characteristically lacking in clar- ity, failing to specify what timeframe the claimed 10-15mn barrel cut related to. However, Ryan Sitton, the head of the Texas Railroad Commis- sion, responsible for energy regulation, tweeted later on April 2 that he had discussed a 10mn bpd cut with Russian Energy Minister Alexan- der Novak.
“While we normally compete, we agreed that COVID-19 requires an unprecedented level of int’l cooperation,” he said.

Brazil wants
production policy within the framework of the G20
Week 14 09•April•2020 w w w . N E W S B A S E . c o m
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