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| Sun, 12th Apr 2020 14:54:00 |
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US backs Opec deal with cuts to boost oil price |
A global deal to cut oil production by more than 10% appears to be on track after the US promised to reduce supply.
Mexico, which initially baulked at the scale of the cuts, said President Donald Trump had suggested the US might make cuts on behalf of its neighbour on Friday 10 April.
Oil prices have been plunging due to coronavirus lockdowns.
However the prospect of unprecedented cuts to supply failed to boost the oil price on Thursday.
G20 oil ministers held talks on Friday to finalise the draft agreement, which would see cuts of 10 million barrels per day.
"This is a time for all nations to seriously examine what each can do to correct the supply/demand imbalance," said US Energy Secretary Dan Brouillette.
America would "take surplus off the market" by storing "as much oil as possible", he added.
Mexican President Andres Manuel Lopez Obrador said the US would make 250,000 barrels per day in additional cuts to oil output, to help Mexico contribute to global reductions.
Mr Lopez Obrador, who has made increasing oil output one of the priorities of his administration, said US President Donald Trump had spoken to him on Thursday and offered to help before Mexico announced it would cut output by 100,000 barrels per day.
"President Trump said the United States committed to reducing by 250,000 (barrels), on top of what it was going to do, for Mexico, in order to compensate," he said.
Opec+, which includes Russia, had said it would cut production in May and June by 10 million barrels a day to help prop up prices. The cuts will then be eased gradually until April 2022.
However,a final agreement was dependent on Mexico signing up, after it questioned the level of production cuts it was asked to make, Reuters had reported.
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