Brazil's energy minister said on Monday that it would attend the G20 meeting of oil ministers that Saudi Arabia is trying to rally together to cut oil production, Reuters reported on Monday.
Saudi Arabia extended the invitation to Brazil on Sunday.
The market is skeptical of any production cut deal that doesn't involve the United States, but Brazil is the oil producer that is expected to be the third-largest growth driver of non-OPEC supply this year behind the United States and Norway. According to OPEC's February MOMR, Brazil's production was expected to grow by 310,000 bpd in 2020.
Brazil's oil production topped 3 million barrels per day in November 2019, according to Brazil's National Petroleum Agency, with total oil and gas production reaching 3.95 million bpd.
Norway, too, is planning on attending the G20 meeting.
If Brazil and Norway agree to get onboard the OPEC+ train with production cuts, it would add to the market-controlling power that the group has.
That's if the group can reach a consensus.
Multiple TASS sources suggested on Monday afternoon that the group may have had trouble agreeing on individual volumes for the cuts, leading to the group pushing the meeting back to Thursday. One of the sources suggested that it was Russia and Saudi Arabia-the two largest producers of the production cut deal that ended April 1-who could not reach an agreement.
The group is still eager to get the United States on board any production cuts in order to give the group more weight to pull up oil prices, although President Trump has said in daily briefings that the issue of the US participation in any production cuts has not been promised.
WTI had slipped 7.45% on Monday afternoon to $26.23 at 3.23 PM CT.
By Julianne Geiger for Oilprice.com
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Comments
Russia won’t then agree to a major cut if the US doesn’t commit itself and if Russia declines, then Saudi Arabia won’t cut either.
The best way to share the 10 mbd cut suggested by President Trump is for the United States to contribute 3 mbd cut to the collective global cuts, Saudi Arabia 2 mbd given its claim that its production capacity exceed 12.5 mbd, Russia 1 mbd and the rest of OPEC and non-OPEC producers including Norway and Brazil the remaining 4 mbd.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London