After inside story by. Will record breaking cuts in production to stop the Oil Price Slump crude producers led by saudi arabia and russia agreed to the biggest of the reduction in oil. So who will be most affected this is inside story. Hello welcome to the program. Factories shut grounded cars and trucks off the roads in many cities under lockdown demand for oil has collapsed due to the coronavirus pandemic and Oil Prices Fell further when major producers saudi arabia and russia couldnt agree on cutting output now theyve set aside their dispute opec and the oil cartels allies agreed to a 10 percent Production Cut the biggest ever but the deal to switch off the top spy 10000000 barrels a day still needs approval from mexico. These circumstances require swift and timely measures all of our Oil Producing countries must pull efforts to change the situation related to the substantial over production of oil in the world the us it didnt take part in the opec discussions on thursday which are the focus of a meeting of g 20 Energy Ministers on friday some analysts say Production Cuts will hurt smaller nations that depend on oil money opec and the International Energy agency warned last month that countries such as angola nigeria and iraq could lose up to 85 percent of the oil and gas income this year. Lets introduce the panel in london alex shindle our president at Energy Intelligence an oil and gas Research Company in new york one health a Senior Research scholar Columbia University and in johannesburg in south africa n. J. Iraq chairman of the african and edgy chamber thank you for joining us gentleman alex simple question ill start with you is a 10 percent cut going to be enough well i think its the best they could come up with at this point i think any deeper than that was going to really stretch the producers ability to actually deliver so the group signaled 10000000 is what they want to do and they achieved it so so i think you know from what was possible its a pretty good outcome though is it going to actually rebalance this market in the short term absolutely not with the coronavirus hitting demands dramatically you know the deficit through the 2nd quarter and even the 1st half of the year is going to be massive so 10000000. 00 is a good start but its not going to fix the problems and so on what do you think do you think will it be enough wont production wont demand decline less than the Production Cut more than the Production Cuts well 10000000 target has been announced. What would be the best outcome of that meeting is and b. And b. Sure star gets some people to n. B. C. That cannot be achieved its the same time too low because the market needs more to rebalance but were going to see additional counts will be announced today from the g 20 and certainly we do see reductions in the us even by Market Forces if not by political decisions. And j in johannesburg for developing nations is 10 percent going to be enough is going to hurt them it is not going to her purse a big deal on distain deputies the cuts for example if you look at nigeria is he look at angola you look at about 1000000 barrels coming out of of nigeria sorry you look at about 100000 coming out of nigeria i mean maybe another 70 or 80000 coming out of angora it is going to hurt in the short term but in the long term its going to be beneficial because the Current Crisis right now speaking for developing countries like nigeria or like the turkey is just not it just doesnt help the countrys budgets it does just as it has with jobs and we already see a lot of job losses so. We want to be in good buckets when you look at it from an african perspective and when can i ask you how we would saudi arabia and russia have been to agree big cuts and i want you to explain a little bit about this mean field game theory analysis youve been writing about which suggests that for the very strongest producers like russia and saudi arabia they can afford to ride this out and push the smaller ones on the shale produces out of the market you know this is a very exceptional crisis i mean this is probably the biggest or little shock that this is dan has received since the 1973 1st or suck all the time in that in 73. 00 the price and thats why the price moves on the upside this time its on the downside but this unique. Implications are in my view have seen a magnitude its going to reshape the production of the oil industry its going to change the system of governance of the of the our system as well you know. But yes what are the analysis that some of my colleagues in a Company Called funder called kairos have done and they clued the kids made all the mathematics and some of his colleagues who have invented the means here the branch of game theory there and that this suggests that opec is not country to wait it up and says in the business of stabilizing places its really in the business of optimizing revenues and managing to conflicting objectives that of having having a high price and having a high market share worth object these are incompatible theyre in conflict therefore the market cycles through peers or price increases and dramatic collapses the mother was signaling for some time that were about to reach. A cliff moment when the price drops off a cliff and that the. Large producers the large low cost producers like saudi arabia and russia where pop be waiting for some kind of a shock to get in to keep moving the stock was the crew on their tires so i think. What they have done increasing supply in the face of the demand collapse increases the impact and really has offered them a chance to drive off some of their competitors. I think theyre achieving those objectives the 10000000 goal that was announced yesterday certainly not prevent a price so the price drop or push the price back up what it might do response power or avoid at the moment when we run out of Storage Capacity but the result in any event is that its going to be much more difficult to finance Oil Production in some more challenge sectors including in the u. S. And. Were going to see some reductions a piece of the margin in Production Capacity so this would increase the market share on the last witnesses alex to go along with any of that this is a coronavirus was the opportunity that russia in saudi arabia might have been waiting for you know i read and. Piece there in a very interesting and it did align with a lot of rhetoric was in the market that this is the the opportunity for the low cost producers to actually deliver on what the what they felt was the only fair way the market should operate why should lower cost producers shut in production and higher cost producers benefit and has been for many years a sway and the coronavirus did give us this interesting opportunity i think what happened here and i think what we found out last week is that 3 russia and saudi arabia in particular were not really prepared for that pain were taken to actually raise their production to maximum levels and then see how low the price goes to drive out everybody else so you know the bait was over how long could these big producers manage Lower Oil Prices and you know i think what i think why this deal came together is that the big countries said you know what its not your interests even over a 6 month 12 month period to have prices be super low even that drives out higher cost producers the economies politically economically they just couldnt really face that reality is i mean thats how i see it playing out and why they kind of come to the table. 2 quicker than i think many had expected and jay nigeria set its budget last year xpect in a price of about 57. 00 a barrel for oil its had to change its budget since can come to nigeria obviously africas subconscience Biggest Oil Producer cani geria ride this out it hasnt got the luxury that saudi arabia and russia have a big financial reserves has it did of course they do it and is going to be very very. If you caught 4 for nigeria nigeria unlike angola you dont really have a Big Sovereign Wealth Fund that could you can count us to share konami put some release and recreate get what you see right here is that these african countries have to then really have to really rely on peg you have to what we call big because you do see orpik as a source for stability but i think its just its even bigger than reserves debt the have its also looking at trying to you investment into fields that have to be developed some of them really play one to increase production and really create in your what team you need for the forward him to see more oil or more gas and i think this sheet of user price war has really given as if you were thinking and not just when it comes to economy dabs to bed damage but if youre looking away from crude or soar focus on crude to release a book in how we can play with gas and really see how gasoline dissection going to really help us rashid the balance of the market so budgets are tight it is very good because for most countries and lets not just look at nigeria lets look at it with korea or guinea lets look at the barn and look at a look at congo but africa is really taking a lot of heat because projects in mozambique would exit a more violent others be having not been counsel but being bored or suspended senate guard had grid gas finds would be cosmos and some of them give more than was bornand or delayed and this is in woodside and karen so were really seeing the brunt around here and we hope that this would ease is really going to change and when this happens the african street just go into a depression and get out get everybody africans started losing jobs and it creates a lot of so shocking issues. We the area around the continents would be given for any kind of this fictitious when it got better saudi arabia or russia or god did it got the gulf states in the United States and one just back on something that alex said before do you think saudi arabia russia work caught out slightly by the scale of the drop in oil prices they werent quite prepared for it they practice a policy of sucking on the trying to relieve some of the market use in the face of the downturn but theres limits to what they could do and actually i think they were marketing and physical limits saudi arabia has been shipping out a lot of thank you is full of oil that has had trouble finding customers for them i think both countries faced problems challengers that were not just financial challenges i think they could withstand 2 of those challenges thanks to their financial buffers but they just had trouble pushing more oil in the system saudi arabia has increased production for manatee we saw the response to the supply response immediately after the breakdown of the opec meeting on march 6th so they were prepared to go into the production but the market could only absorb so much for their production so that i think that the time was right that the trip through the mover played out the rest of the word came together and agreed to cut production and then were going to see another meeting today at the g. 20 to discuss for further Production Cuts so the objectives i think was achieved but now its time to do. A better back of the beads and just the reality that the market is getting saturated and the capacity Storage Capacity there were the getting stretched as well and ill add to the temperature around 10 percent Production Cut enough for us shale produces well i think youre going to see i mean the next week well see how the u. S. Shell produces react to it weve got the g. 20 meeting today where you know it but were going have a lot of discussions around cunt. Is that are not part of the 0 plus alliance to see how much actually theyre going to be participating that were hearing anything up to 5000000. 00 barrels them or the next week is the kind of key he week to watch for sort of us shell producers and what exactly are u. S. Production in general or what thats going to what theyre going to be able to deliver and whether theyre going to deliver just the Market Forces impact of Lower Oil Prices than the shut in that will have to show because prices are in the 30. 00 range or whether theres going to be more active management the market is the Texas Railroad commission and other states that are talking about doing something but this is going to take as we understand about oh a week to sort of play out because its needing theyre going to happen and the 14th next week with the Texas Railroad commission and then sort of a final decision by the end of next week to sort of see how much the u. S. Is really going to be able to commit actively or sort of just by Market Forces and enjoy the developing countries are almost side actors in this game between saudi arabia russia and the u. S. Do they have any leverage at all theyre the ones that are really going to feel most of the pain if they have any way to put pressure toward anyone. I think the already putting pressure on seeing them true membership in opec and opec plus dont forget the huge role of nigeria angola likely to write the me if played or picked presidency right now is around managed by an african and i dont know from our geria days how shit when it comes to Market Forces of course that we dont really have that march when looking at how much we eat in port and how much we use china still has to come out i think between out here because their prices bed their heck there has been a continuous push among african states on how to get out on how this needs to go about not already would have been countries were very happy would get cuts and what happened at opec yesterday big deal united together and i talked to a lot many of them to accept it because you understand that if there we get more stuff the Lights Market its really good for us been then what has happened is that you have the Lessons Learned from yesterday was in your focus on exploration and saying to got to increase young market share so that it can really really i not see throw in shipping is immediate dialogue in the future and does it big lesson when he concentrated on in the big environment so that you can be a player do these developing countries have any leverage or is it all of a all out of the game and its all up to saudi arabia and russia can they do anything saudi arabia and russia really exciting another. One saying and controlling the situation of course the country driver is there a pandemic but you know that the the 2 countries go to the superpowers of oil the largest exporter so it really played their cards in my view quite well and have made the most of this these very difficult circumstances and to go back to the point you raised before in terms of the response of the show producers in the us were seeing a. As to the company i was mentioning carol was a work with monitors activities in the in the dog past in the us and money to recount but also the fact whos whos echoing through the faculty. Weve seen a dramatic drop in in fact whos in the number of. So explosives are active in the in the base incident last month weve seen a decline of 105. 00 clips. In the shooting thats a very dramatic climb 60 percent month month a month decline 60 percent you know a new news probably more the plan is coming and i like that the u. S. Is going to be under some pressure to cut production itself it costs of cant officially do it through it because they want to trust laws how could the u. S. Play its role in cutting production the Texas Railroad commission they do have the ability to sort of manage texas oil supply so i think if anyones looking for active market us it looks like through a Texas Railroad commission is the most likely way that could happen though this necking is an x. Ray machine has not been utilized for many decades we dont really know how we operate and the current sort of 2020 environment but what we do know is that the 3 commissioners are not texas for a commission at least one of them its very favor of some active Market Management you need to. So this is the scene at the white house its the press Briefing Room at the white house. We are awaiting President Donald Trump and and in fact she is always so he can be of the current virus taskforce the Vice President usually attends these things thats my plans but were expecting her to start imminently lets bring in can be held at while we wait for this committee this is normally a briefing thats held 3 or 4 hours from now but they brought it forward today. Yeah that part of ford because of the Holiday Weekend one can only presume that many in the United States celebrating passover good friday easter weekend and this is also a time where were getting Strong Public Health warnings from some of the top officials on the current virus taskforce there and that they are concerned one of their big concerns going into this Holiday Weekend is whether or not americans are going to relax a little bit because they are accustomed to maybe getting together for a family dinner or what have you and the they may ignore some of the restrictions the 6 feet distancing guideline the social distancing guideline the stay at home unless its absolutely essential or that you know theres really no need to leave your house has been the guidance and so weve been hearing from dr anthony found she specifically here in the United States and some of the morning networks where they have said things like you know what were concerned is that we need to keep our foot on the accelerator as he calls it in terms of keeping these guidelines going because if we dont here in the United States there could be a 2nd wave much like we saw in new york city so there have been some glimmers of hope that they may be starting to turn the corner in new york but still it is the hardest hit state in the United States there are other hot spots theyre concerned about washington d. C. Where i am right now being one of them also philadelphia and gravely concerned about some of the Southern States like louisiana so the guidance is to continue these restrictions into the holiday break thanks very much indeed it will straight to the podium you can see the u. S. President standing right there about to address them. Just a few days good friday and this sunday millions of christians celebrate easter and the resurrection of jesus christ. At this holy time we pray that god will heal the sick and comfort the heartbroken and bless our heroes. As American Families look forward to easter were reminded that our story ends not in despair but in triumph and renewal. Very appropriate isnt it id like to provide americans an update on our ongoing efforts in the war against the invisible enemy before i do that ill have a couple of notes the United States in discussions less that with mexico saudi arabia russia and the dealing with opec nations. We are trying to get mexico as the expression goes over the barrel. Then mexico is committing to do 100000 fewer barrels the president tonight spoke less knightly of a great relationship with friendship helping us very much at the border they have 27000. 00 soldiers mexican soldiers on our border right now stopping people from coming into our country as our wall goes up were up to about 168 miles of wall and. In speaking with the president they have a limit the opec nations have agreed to a different limit reduction of about 23 percent so what i thought i would do and i dont know that its going to be accepted well find out the United States will help mexico along and theyll reimburse us some time at a later date when theyre prepared to do so. And we had a great conversation but well find out how that all works out as you know theyre trying to get rid of that lot of oil this a tremendous lot of oil and we dont want anything to hurt our incredible industry actually the largest producer in the world now so we dont want anything to hurt those jobs as great jobs in texas and north dakota and oklahoma and everywhere we have a Tremendous Energy new mexico Tremendous Energy business and we want to keep those jobs so were were working on it i think eventually its going to work out may work out quicker than what most people thought possible and maybe it wont but it will work out eventually our experts are monitoring the data from every part of our country having to do with the topic that were here to discuss in the midst of grief and pain were seeing clear signs that our aggressive strategy is saving countless lives. Tremendous progress is being made although when you look at some of the numbers or just book with Governor Cuomo with a good talk when you look at those numbers. The numbers of death people that of died. Its so horrible now on the other side you have the numbers of beds being used weve just saying are substantially ridges that usually the sign that its heading in the downward curve. So in new york we know where that is. But in the midst of all this grief and this pain were seeing these signs and were seeing a very strongly that a lot of that has to do with the aggressive strategy in saving so many lives or saving so many lives compared to what it could have been so nobody knows what the number is but we had a number of 100000 lives as many as that is its impossible to even think of it and that was the low end with a tremendous amount of work and a tremendous amount of. That you can call it many different things. Or people had to be extremely strong and brave to be able to put up with what theyve put up with but. The minimum if you did this that social distancing. And every other aspect and i think i can say 90 percent maybe even more than that were able to do it the minimum number was 100000. 00 lives and i think will be substantially under that number hard to believe that if you had 60000. You can never be happy but thats a lot fewer than we were originally told and thinking so they said between 10220000 lives on the minimum side and then up to 2200000 lives if we didnt do anything but it showed just tremendous resolve by the people of this country so well see what it ends up being but it looks like were headed to a number substantially below the 100000 that would be the low mark and i hope that bears out. The situation in detroit in new orleans appears to be stabilizing detroit is really started to go up and now it is stabilizing in new orleans is. A great place i have so many friends that they cant believe whats happening but its really stabilize i spoke with the governor of louisiana and as you know were building them additional beds right now the army corps of engineers and fema and. That is going to be done and i hope theyre not going to be very well used because i think theyve really i dont think theyre going to need them or certainly not very many of them were built im a big hospital of a 1000 beds and now where were in the midst of doing another 1000 i dont think theyre going to be using very many of them thats a good thing and there was a time 2 weeks ago when we said thats not going to be nearly enough were going have to build more but we wanted to wait to see and im glad we were it just looks like theyre doing really well in louisiana and state of michigan is. Doing really much better than we thought in Washington State weve made enough progress that the governor is now able to return an Army Field Hospital so were going to take that hospital we dont think we need anymore hospitals weve built thousands of beds all over the country and we think were probably not going to need that hospital anywhere if we do were ready to move it to a different location in new york were seeing hospital admissions declining very substantially as i said a nationwide the number of new cases per day is flattening substantially suggesting that were near the peak and our comprehensive strategy is working overtime our guidelines to slow the spread or decreasing the rate of new cases very substantially and will result in fewer hospital admissions and were seeing that its. Incredible i think with the with no exceptions its looking like its low and again thats because of the people doing what they had to do great people and and working with elected representatives and and the doctors the nurses and everybody i mean just everybody everybody is of so has been so amazing
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