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Mexico to sit out extension of OPEC+ oil output cuts

Published 07/06/2020, 00:33
Updated 07/06/2020, 00:35
© Reuters. Mexico's Energy Minister Rocio Nahle  attends a news conference at the National Palace in Mexico City
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MEXICO CITY (Reuters) - Mexico will not join other top oil producers in extending through July output cuts aimed at propping up the price of crude, Energy Minister Rocio Nahle said on Saturday.

Made up of OPEC members and allies led by Russia, the group known as OPEC+ agreed in April to cut oil supply by 9.7 million barrels per day (bpd) in May and June to support prices.

Under that deal, Mexico pledged to reduce its crude output by 100,000 bpd in May and June, after resisting pressure from other oil producers to make cuts of 400,000 bpd.

The cuts had been due to taper to 7.7 million bpd from July to December, but on Saturday, OPEC+ agreed to extend the production cuts until the end of July.

Mexican President Andres Manuel Lopez Obrador, who has vowed to ramp up the country's crude oil production, said on Friday that Mexico was not in a position to make additional cuts on top of what it had agreed in April.

His energy minister Rocio Nahle confirmed Mexico would not participate in the fresh cuts agreed on Saturday.

"There are other countries that extended their cuts to July, in this case we said no, we'll stick to the agreement that we signed in April," she told reporters in the eastern state of Veracruz. "There's no problem."

© Reuters. Mexico's Energy Minister Rocio Nahle  attends a news conference at the National Palace in Mexico City

Mexico's unwillingness to go as far as other OPEC+ countries in making output cuts caused friction with Saudi Arabia in April. Agreement was reached after Mexico said the United States would help make up the difference.

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