Oil Prices: Trump Promotes OPEC, Russia Deal On Output As Mexico Offers Support

The Organization of Petroleum Exporting Countries (OPEC), along with partner countries such as Russia, have agreed to boost oil prices by cutting as much as 10 million barrels a day in production. President Trump has promoted the deal, as it will safeguard the U.S. shale industry.

Mexico was initially skeptical of the agreement, with Mexican President Andres Manuel Lopez Obrador hesitant to cut production levels. But Obrador decided to support the deal, as the U.S. will compensate for Mexico in the near term.

“The United States will help Mexico along and they’ll reimburse us sometime at later date when they’re prepared to do so,” Trump said at a White House press briefing Friday.

Mexico wanted to only cut production by 100,000 barrels a day but OPEC wanted Mexico to contribute more. The U.S. agreed to cut 250,000 to 300,000 barrels to fill the gap.

“There's no real cost because you’re saving it for another day,” Trump added.

Oil prices saw a decline after Russia and Saudi Arabia engaged in a price war on March 8. The two countries could not agree on cutting production, due to a lack of demand amid the ongoing coronavirus outbreak. They instead decided to boost output in a race for market share.

U.S. West Texas Intermediate is at $23.19 per barrel.

The coronavirus outbreak has drastically reduced economic activity around the world, as countries shut down non-essential businesses and people stay home. As of Saturday at 10 a.m. ET, there are 1,715,143 cases of coronavirus around the world, with the global death toll standing at 103,874.