Occidental Petroleum opposes a mandatory Texas-wide production cut, but calls on the US administration for federal financial aid to the American oil industry, which cannot make money at $ 30, Bloomberg reported Thursday, citing a letter to Congress that he had seen.
Oxy is looking for the U.S. government to “ provide liquidity to the energy sector during this period of unprecedented demand destruction and unsustainable prices until normal economic conditions return, ” the letter said in an email from April 7 and seen by Bloomberg News.
In the letter, Occidental also called on American lawmakers to meet with the de facto leader of OPEC and the world’s largest oil exporter, Saudi Arabia, to end its feud with Russia, to seek a equitable access to American oil in Asian markets and to support oil. purchases for the Strategic Petroleum Reserve (SPR), reports Bloomberg.
Although Oxy is seeking government help for the US energy industry, she opposes the idea of the Texas Railroad Commission imposing production restrictions on Texas.
“The Western position is that the surge in oil supply coupled with declining demand for oil will resolve without interference from state regulation,” said Bloomxy, citing Oxy in a note to the oil regulator. from Texas. According to Occidental, the production reductions in Texas would spoil contractual obligations and, consequently, they would be “extremely short-sighted”.
ExxonMobil is also opposing production cuts in Texas, the American supermajor said in a letter published by Reuters on Wednesday.
The free market is “the most effective way to deal with the extreme supply and demand imbalances we are currently experiencing,” said Staale Gjervik, president of the Exxon shale division, in a letter to the authorities. Texas regulatory body.
US President Trump said this week that he believed cuts in U.S. oil production would happen automatically due to the nature of the free market.
Texas Railways Commissioner Ryan Sitton said Wednesday the United States would organically reduce at least 4 million barrels a day over the next three months. Sitton said earlier that he would not be participating in the OPEC + call today, “but if I were, I would say that at least 20 Mb / d of cuts are needed and the United States will organically cut at least 4 Mb / d in the next 3 months. If nothing is done, the inventories fill up in 2 months, in which case the world will have to reduce up to 30 Mb / d. “
By Tsvetana Paraskova for Oilprice.com
More readings from Oilprice.com: