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Mexico’s president said that the US agreed to cut 250k on behalf of Mexico. So Mexico will cut 100k and the US will 250k #OOTT
Sounds good if true...
RD12,
Thanks for the discussion.
atb
Amena Bakr
@Amena__Bakr
·
4m
Mexico president : Yesterday I spoke with the president trump about of the reduction of the production and we reach and agreement to reduce only 100 (not 400) and the US will be reduce the other part of Mexico’s share #OOTT #opec
kotb so again, that further suppresses prices. You need to understand, oil cuts mean less gdp less movement, less everything. Let's assume cuts average 20% for 2 years on average.
So oil carries about 8% of US gdp, no idea about global, 20% cut for 2 years is 1.6% gdp loss.
1.6% gdp would put UK into RECESSION.
RD,
"We need more than an average 13% cut. For two years..."
That's why, as stated in the agreement, they will met AGAIN in two months to review and amend deal as required.
kotb, no - watched/read the news.
But if you want to get into it further - oil tankers / storage 100% full in 2 months possibly less some have quoted one month. This has way more downside story than upside, especially when we are as much as 35% down on oil consumption.
We need more than an average 13% cut. For two years. This almost guarantees suppressed pricing doesn't it.
RD,
It's only a single sheet !
Don't think you have read it have you .. just taken the headline news figures maybe !
The deal is one that I find difficult for Mexico NOT to play ball with, unless they want something from the US today in return that is?
kotb - I'll read further, thanks for clarifying.
RD, read the full agreement .... its scaled back during that time 2 months at 23%, then 6 months, then lower still contribution into 2021 / 2022 even less .... down to 8%.
AVERAGE over this period is ONLY 13% CUT IN PRODUCTION.
KOTB - what have I misunderstood?
'The deal includes a 5 million barrels per day reduction between Saudi Arabia and Russia with the other 5 million in cuts being taken by the remaining nations of OPEC plus, the Financial Times reported. The cuts will be phased out gradually up to April 2022.'
2022?
rd12,
You don't understand .... the 400k barrel cut a day is for 2 MONTHS ONLY ffs
Mexico produce 2.5% of thw worlds production. I don't thay can have a significant impact globally based on wheter they cut or not. A bit of a push to day mexico are going to f*** it up.
Exactly if they don’t do this deal the whole industry collapses. They are to ensure they all get the message and play ball and now opec and opec+ have shown the way. If Mexico don’t want to play ball well there is more that one way to skin a rabbit.
Yeah Degsy but to call Mexico an easy iron out is a laugh, your into oil, literally swimming in it. fine. I was too until yesterday.
But in case you don't understand something:
49$ hedge
400k barrel cut a day
300 odd days
You're asking a country that don't need to play ball to drop 5880000000$
lol.
Mexico were in the oil and economic trash can before covid ...theyve offered 100kbopd mightdouble that and the others take the hit...
The US will never burn it is called the petro dollar for a reason. As long as we are on that system governed by the fed the USA is protected. The are head and shoulders above all countries worldwide for GDP by circa 10 trillion dollars pa.
Oh, one minor point .... the storage tanks would be full in no time if no deal, so not sure where they intend to sell the hedged oil too ..... nowhere to put it. Then they will have to shut virtually ALL their production down, along with the rest of the world. Bang goes Mexico's big budget plans !!! lol
Mexico appears needs it put into simple terms....... as they are incapable of doing the math and logistics themselves.
Degsy, you reckon Mexico aren't going to rinse this? You must be in oil to point of drowning or pure delusional.
1.78mbopd. 80% a guess yes but otherwise they'd willingly have capacity to shut in to get the higher price on lower amount.
Ultimately when poo goes up they all prosper; the issue they have is making sure they’re all singing from the same hymn sheet and there isn’t some taking the pi55.
Exactly Mr Investment lol. And notice Brent closed at 31.77 and more cuts will be announced later today. The whole point of this exercise is get the price up so I expect this to happen. Plus the opec cuts are not contingent on G20 cuts. The 10mbopd cuts are in the bag. Mexico is a minor issue that will be ironed out.
Note : "not disclosed how many barrels the hedge covers"
So not sure where you got 80% of production from ... if true still allow for 340k reduction. The other 60k would only need to run at a loss for 2 months, ( or bring forward maintenance program for the 60k) after which the requirement from Mexico would fall to 320kbpd ..... so they can do it without much of a problem imo.
They are just being an ar*eh0le
yeah they said 2020 budget, but since fuel use is down at least 20% but probs 35% right now, lets assume they are hedged till march-april 2021. Happy days for them, they must want the US to burn. How the shoe on the other foot for once etc...
They hedge a lot, I remember 40% being we quoted. Considering January and most of February were above 50 not sure how much is used