OPEC+ oil output cuts depend on US and others joining

Saudi Arabia, Russia and allied oil producers will only agree to deep cuts to their crude output at talks this week if the United States and several others join in with curbs to help prop up prices that have been hammered by the coronavirus crisis.

Global oil demand has dropped by as much as 30 percent, or about 30 million barrels per day, as measures to prevent the virus spreading have slashed demand for jet fuel, gasoline and diesel. France reported on Tuesday a 80 percent drop in its petrol use.

On top of sliding demand, Saudi Arabia has been flooding the market with extra crude after the collapse last month of a three-year-old deal with Russia on limiting supplies between OPEC and their allies, a group known as OPEC+.

OPEC+ is due to hold a video conference on Thursday, after US President Donald Trump said last week he had brokered a deal between Riyadh and Moscow on cuts amounting to an unprecedented 10 million to 15 million barrels per day, or about 10 to 15 percent of global supplies. Nothing has yet been formalised.

An OPEC source told Reuters the size of any OPEC+ curbs depended on volumes other producers such as the United States, Canada and Brazil were willing to cut.

Other OPEC+ sources have echoed this, saying it hinged on action by the United States, where costly shale oil production has surged with the help of OPEC+ action since 2016 to support prices. "Without the U.S., no deal," said one OPEC+ source.

The United States has yet to commit to any cut, while Trump has said U.S. oil production had already fallen.