Mexico to Cut Oil Production by 100,000 Barrels a Day

By Anthony Harrup (WSJ)

April 10, 2020 9:32 am ET

Move is part of agreement with OPEC to stabilize oil markets amid coronavirus pandemic

MEXICO CITY—Mexican President Andrés Manuel López Obrador said Friday that the country will reduce its crude oil production by 100,000 barrels a day as part of an agreement with the Organization of Oil Exporting Countries and other producers to stabilize oil markets.

In his daily press conference, Mr. López Obrador said the agreement was reached in a phone call late Thursday with President Trump, who “generously” committed to cut U.S. output by an additional 250,000 barrels a day to compensate for Mexico. OPEC and other producers were notified of the agreement, he added.

Mexico’s rejection of demands that it lower its output by 400,000 barrels a day threatened to derail the agreement among world producers to remove 10 million barrrels a day from global output as demand dries up given the economic fallout from the coronavirus pandemic and prices plunge.

Starting in May, Mexico will cut its production to 1.68 million barrels a day from an average of 1.78 million in March, Mr. López Obrador said. OPEC and the other producers first wanted Mexico to cut 400,000 barrels, then 350,000.

“Mexico is contributing. In general its 5.5%, we couldn’t manage 23%” in cuts, he added.

Since taking office in December 2018, Mr. López Obrador , and his government is reluctant to make cuts since the has sought to increase output at state oil company Petróleos Mexicanos[. The] country’s production has fallen by about half in the past 15 years.

Write to Anthony Harrup at anthony.harrup@wsj.com