American oil company ConocoPhillips voluntarily cuts oil production by 225 thousand barrels per day. This was announced on Thursday, April 16, in a press release of the company.
Production in May is expected to be reduced by 100 thousand barrels per day, and then the company will shut down production processes, thereby reducing production by another 125 thousand barrels per day.
“With these actions we express our view that oil prices will remain weak in the near future, mainly due to the impact of COVID-19 on demand and continued oversupply. We have the flexibility to take actions that we believe support our relative competitive advantage and the ability to resume programs depending on the timing and recovery path,” the company said in a press release.
On April 12, OPEC+ countries reached a final agreement to reduce production by 9.7 million barrels per day from May 1, 2020 to early May 2022. Under the agreement, Russia and Saudi Arabia will reduce production by 2.5 mn barrels per day each.
In addition, Saudi Arabia, UAE and Kuwait, in addition to the OPEC+ deal, have agreed to voluntarily cut oil supplies by an additional 2 million barrels per day to help oil prices.
There was a rift between OPEC+ member countries over the issue of oil production reduction on March 6. Later, the media reported that Saudi Arabia plans to increase production to 10-12 mn barrels per day and reduce prices for its oil. A few days later, oil markets collapsed by 30%, the ruble fell markedly against the bi-currency basket, and shares of Russian companies began to lose their positions.