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Photo: Joe Klamar/AFP via Getty Images

OPEC+, led by mega-producers Saudi Arabia and Russia, reached a tentative agreement Thursday to impose large cuts in oil production as the coronavirus pandemic fuels an unprecedented collapse in demand, per Bloomberg and Reuters.

Why it matters: The revival of the OPEC+ collaboration patches up the early March rupture between the countries, which had pushed already depressed prices down much further by threatening to unleash even more new supplies into the saturated market.

  • The news outlets, citing anonymous sources in the group, say the emerging OPEC+ agreement calls for cutting 10 million barrels per day in May and June.
  • That would amount to roughly 10% of global demand levels before the outbreak, which analysts now see cutting around 25 million to 30 million barrels per day — or more — from global consumption in the near-term.

How it's playing: Oil prices rose earlier today in apparent expectation of the agreement, but later fell back.

  • Prices surged late last week when talk of a very steep cut first surfaced. Today's limited move suggests traders have already priced the reductions in — and recognize they pale in comparison to demand losses.
  • The global benchmark Brent crude was trading at around $32-per-barrel as of 2:30pm ET — around $10 higher than they were in the middle of last week but below where they started the day.

How it works: Per the Wall Street Journal, Saudi Arabia is pledging to curb 4 million barrels per day from April production levels, while Russia will scale back by 2 million barrels daily.

  • "The tentative OPEC+ plan would see 10 million barrels a day of cuts through June, dropping to 8 million a day from July and then 6 million a day in the first quarter of next year," Bloomberg reports, citing an anonymous delegate to the meeting.

What they're saying: "The market's muted price reaction is a sobering indicator of the headwinds that remain, namely demand destruction," RBC Capital Markets analyst Michael Tran told Reuters.

  • "If true, the preliminary production cut of 10 million bpd among OPEC+ members is a good first step, but it would still not be enough given the 20 million bpd+ supply overhang expected for the second quarter of 2020," the consultancy Rystad Energy said in a note when word of the agreement began emerging.

What's next: Energy ministers from G20 nations are slated to meet remotely Friday, and Russia and Saudi Arabia are hoping for millions of barrels per day in combined cuts from countries outside the OPEC+ group, including the U.S., the world's largest producer.

  • The Trump administration has declined to offer firm commitments, but he has repeatedly touted upcoming market-driven cuts in U.S. production as low prices prompt oil and gas companies to scale back.

Go deeper: EIA forecasts U.S. oil boom will reverse amid coronavirus disruption

Go deeper

Senate retirements could attract GOP troublemakers

Sen. Roy Blunt (R-Mo.). Photo: Jim Lo Scalzo/EPA/Bloomberg via Getty Images

Sen. Roy Blunt's retirement highlights the twin challenge facing Senate Republicans: finding good replacement candidates and avoiding a pathway for potential troublemakers to join their ranks.

Why it matters: While the midterm elections are supposed to be a boon to the party out of power, the recent run of retirements — which may not be over — is upending that assumption for the GOP in 2022.

Congressional diversity growing - slowly

Data: Brookings Institution and Pew Research Center; Note: No data on Native Americans in Congress before the 107th Congress; Chart: Danielle Alberti/Axios

The number of non-white senators and House members in the 535-seat Congress has been growing steadily in the past several decades — but representation largely lags behind the overall U.S. population.

Why it matters: Non-whites find it harder to break into the power system because of structural barriers such as the need to quit a job to campaign full time for office, as Axios reported in its latest Hard Truths Deep Dive.

Staff for retiring Senate Republicans a K Street prize

Illustration: Eniola Odetunde/Axios

The retirements of high-profile Senate Republicans mean a lot of experienced staffers will soon be seeking new jobs, and Washington lobbying and public affairs firms are eyeing a potential glut of top-notch talent.

Why it matters: Roy Blunt is the fifth Republican dealmaker in the Senate to announce his retirement next year. Staffers left behind who can navigate the upper chamber of Congress will be gold for the city’s influence industry.