Earlier this month, the Organisation of the Petroleum Exporting Countries (OPEC) and its allies agreed to reduce oil production by 9.7 million barrels per day in May and June, followed by 7.7 million per day for the second half of the year, and then by 5.8 million per day until April 2022.
British energy company BP stated on Tuesday that it has lost $4.4-billion in the first quarter as the coronavirus pandemic crushed demand for oil, triggering a price crash.
“Our industry has been hit by supply and demand shocks on a scale never seen before. The economic impact of the COVID-19 pandemic coupled with pre-existing supply and demand factors have resulted in an exceptionally challenged commodity environment,” BP’s new chief executive Bernard Looney said.
Earlier this month, in a bid to uphold dividends amidst the plunging oil prices triggered by the coronavirus pandemic, the London-headquartered company said it would bring spending down from the projected $15bln to $12bln this year, including a $1bln cut in spending on its US shale projects, BPX, acknowledging this would probably lead to a drop in oil production.
According to experts from the energy industry cited by Bloomberg, daily consumption of oil could plunge by 15-22 million barrels in April vs the same period last year, with the price of Brent Crude Oil benchmark, currently traded at less than $20 per barrel, likely to nosedive to $10 per barrel amid an over-excess of oil.