G20 to focus on SPR builds to reassure oil markets

G20 to focus on SPR builds to reassure oil markets

The G20 energy ministerial discussion tomorrow aims to reassure Opec+ producers that key oil consuming nations globally will do their part to stabilize markets by filling their strategic oil reserves, Argus reports.

The US and the IEA, which pushed for a G20 discussion, also will argue that deep cuts in drilling expenditures by oil companies globally mean that state-controlled or owned producers are not alone in addressing the supply glut.

The G20 meeting is meant to build on a presumed success of today's Opec+ meeting in reaching a production cut agreement. But in turn, the outcome of the Opec+ meeting depends on whether Saudi Arabia, Russia and other major producers accept those assurances from key consuming nations at face value.

"I expect that some countries will announce that they are going to buy oil in order to fill their strategic oil reserves and as a result give a lifeline to oil demand," IEA executive director Fatih Birol told Argus earlier this week.

Mexico, which is taking part both in the Opec+ meeting and the G20 discussion, said it does not anticipate cutting production as part of a wider agreement between the members of Opec and other major oil producers. "Most countries are working to reach consensus on stabilizing oil (markets)," Mexico's energy minister Rocio Nahle said on Twitter at the start of the Opec+ discussion.

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