As Demand For Oil Dries Up, OPEC And Allies Agree To Historic Cuts In Output
Been a news over the weekend. Many of the world's oil producers have agreed to cut production to prop up prices. Npr's Camilo Domino ski reports on their deal. The average price of a gallon of gasoline in the United States is well under two dollars but many people aren't filling up because they're not going anywhere that's the state of the oil market in a nutshell. Oil is super cheap. And there's not much global demand. What's that done to oil producers? Here's Muhammed Burkino. The Secretary General of OPEC on Thursday Industry. Mr Chairman is hemorrhaging. No-one has been able to stem the bleeding. In fact instead of stopping the bleeding Saudi Arabia and Russia were adding to it by waging a price war against each other. But now they've called a truce and OPEC is trying to put a bandage on those wounds. Actually it's OPEC. Plus the oil cartel has expanded from its core members to include allies like Russia and Mexico and when Mexico threatened to derail this deal. President trump stepped in. We are trying to get Mexico as the expression goes over the barrel the. Us is the world's largest oil producer and American oil and gas companies have been hit hard by low prices. President trump is often hostile towards OPEC. But this time he helped them out. The new deal is massive nearly ten million barrels of oil per day in cuts. That's the biggest deal in OPEC history but the drop in demand than twice that amount. Rozsa Dewan is an oil strategist. Ihs market but there's no cut that can match that degree of shrinkage in the market possible so despite the new deal oil prices are still low. In fact says the steel isn't about propping prices up. It's about avoiding the collapse of the oil industry. Camilo Domino NPR news.