Opec and Russia agree 10% oil production cut, the largest ever in history
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Combustion Industry News Editor
Opec and Russia have agreed to cut oil output by 10 million barrels/day (around 10% of global production) in an effort to raise global oil prices, a move that has been endorsed by the G20 and the US. It is the largest ever supply cut, and comes after prices fell to their lowest in 18 years amid a fall in global demand of approximately one-third and a prior disagreement between Saudi Arabia and Russia that led to Saudi Arabia raising production. The US, also a major producer, did not take part in the agreement, but market forces have been triggering a reduction in output regardless. The Financial Times has reported that storage facilities have been filling up, and producers had anyway been reducing output because of low prices. Whether the Opec, Russian and US production cuts will be sufficient to bring supply more in line with demand remains to be seen, but at this point it would seem that they are presently insufficient.