World's biggest oil producers still at odds before crunch talks on oil output cuts

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Published: Wed 8 Apr 2020, 10:39 PM

Last updated: Thu 9 Apr 2020, 12:47 AM

The world's top oil producers Saudi Arabia, Russia and the United States still seemed at odds on Wednesday before this week's meetings on potentially big output cuts to shore up crude prices that have been hammered by the coronavirus crisis.
Saudi Arabia and Russia, which fell out when a previous pact on curbing supplies collapsed in March, have signalled they could agree deep cuts to crude output but only if the US and others outside a group known as Opec+ joined in.
But the US Department of Energy said on Tuesday that US output was already falling without government action, echoing views from the White House that it would not intervene, even as global demand for crude has plunged by as much as 30 per cent. US President Donald Trump said last week a deal he had brokered with Saudi Arabia and Russia could lead to cuts of as much as 15 per cent of global supplies, an unprecedented level.
Yet Moscow and Riyadh have yet to publicly indicate any agreement on the level of any reductions or how to distribute them among Opec+, which includes the Organization of the Petroleum Exporting Countries, Russia and other producers.
"Let's wait for tomorrow or the day after," said Kremlin spokesman Dmitry Peskov, when asked about Russia's position before today's Opec+ talks.
Energy ministers from the Group of 20 nations also hold a video conference. Moscow, Riyadh and others need to agree on what national production level, or baseline, for calculating cuts, an issue muddied since last month's acrimonious Opec+ meeting in Vienna that led to limits being scrapped and race for market share that flooded an already oversupplied market with extra crude.
Saudi Arabia ramped up output to a record 12.3 million bpd in April, up from below 10 million bpd in March. The UAE and Kuwait also raised production.
Opec sources said Riyadh wanted any cuts calculated from April levels. But Russia has said cuts should be based on first-quarter levels. "The issue is still the baseline," an Opec source said. Asked about what baselines were being negotiated, the source said: "April versus anything else before April."
Russia's Tass news agency said any cuts could last three months starting from May. Others have not indicated how long they could run.
- Reuters

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