Word from DC the "Oil Diplomats" are negotiating a deal. Could culminate in Friday meeting and agreement that includes all G20 countries

[BLA + 1,666]

I can confirm there are talks amongst the G20 Energy Ministers.

From the sounds of it I'm guessing it may contain some type of price fixing scheme. 

If it was simply a production cut agreement why include the G20.

Production cuts have really never worked and would not come near to what is needed.  

Will price fixing work.  I haven't a clue.

How will market share be divided ? Will producing countries that have higher shipping costs be put at a serious disadvantage ?  

For example why would Saudi Arabia be allowed to continue to export twice as much as the next closest producer.

Will the U.S. participate ?  

A lot of questions .  No answers yet.

Messing with Free Market rarely ends well. 

Could just be more talk and joint statements.  Oil can trade on rumors, insinuations and falsehoods. Why change now. 

Just the "talk" or a "leak" of possible price fixing would scare the pants off of the shorts and support prices at least thru the week.

PS: re production cuts

Saudi Arabia has convinced the world that production cuts are the answer.  It's bull.  

1. First nobody complied.  Look at Saudi Aramco financial disclosure statements. Aramco avg 10mm bbl/d in 2018 and the same in 2019.

2. You can't monitor cuts and can't monitor compliance. 

The only solution that might work is for producers to cut exports .  Actually take product off the market.  

SAUDI/OPEC+ DOESN'T WANT THAT.  ITS MORE DIFFICULT TO CHEAT.  

There might be a 25% chance of export cuts working in a "normal" market.  Nothing will work in this Covid oil market. 

The oil industry is a big part of the U.S. economy.  

The oil industry is EVERYTHING to the Saudi economy and other oil states. Be glad we're not them.  Expect anything and everything from KSA . . . they have no good choices.

Edited April 6, 2020 by BLA