Oil price gyrations have added an extra layer of complication to the coronavirus-linked turbulence, crashing 70% from January highs before bouncing on President Donald Trump’s claim to have brokered a Saudi-Russia deal to cut output.
Still, sources say the OPEC+ crude oil exporter group – 14 OPEC members and 10 non-members including Russia — is debating cutting global supply by 10 million barrels per day (bpd). A video conference is scheduled for April 6, the energy minister of non-OPEC crude producer Azerbaijan, said.
But OPEC wants producers from outside the bloc to join the cuts. Canada’s Alberta province, home to the world’s third-largest oil reserves, has hinted it could comply. But Trump does not plan to ask U.S. producers to curb production.
And a 10 million bpd reduction may not do the trick. Demand has dropped by 30 million barrels bpd, the combined output of Saudi Arabia, Russia and the United States. U.S. storage tanks are brimming, meaning its shale oil firms may have to cut production anyway.