Representatives of OPEC+ countries negotiated record cuts of up to 20 million barrels per day, equivalent to about 20% of global production.

“We are optimistic that an agreement will be reached between Saudi Arabia and Russia in an attempt to stabilize markets”, said the US Energy Secretary Dan Brouillette before Thursday’s meeting. “I think they can easily negotiate 10 million, maybe even more and certainly more if you include other oil-producing nations, nations like Canada and Brazil and more. Easy, easy to make”, added he.

US President Donald Trump has hoped for cuts in production far greater than ever before under OPEC+, suggesting that the Energy Union could make a deal to cut production by between 10 and 15 million barrels per day. For their part, Saudi Arabia and Russia have signaled that any agreement will have to include actions from countries outside of OPEC, such as the US, Canada, and Norway.

“OPEC+ is trying to significantly reduce its output to cause a sharp jump in prices”, said John Kilduff of Capital. “The virtual conference will be the most important moment for the oil market”, added he.

The G20’s energy ministers will convene an extraordinary meeting on Friday, with US Energy Secretary Dan Brouillette also attending. The meeting will be held “to promote global dialogue and cooperation in order to secure stable energy markets and to strengthen the global economy”, G-20 officials said.

As for US energy companies, Donald Trump commented that market forces will prevail, and said Wednesday that manufacturers “have already cut much of their output”. Dan Brouillette, for his part, said that “the decline in demand led to a decline in production in the United States by about 2 million barrels per day”.

RBC’s Helima Croft said the chances of “reaching a broad framework agreement to curb production are greater than ever”, but noted that “the situation remains extremely volatile” and there are plenty of “pitfalls” that can lead to the failure of the negotiations.

But even if a deal is struck, many argue that prices will remain lower for longer due to unprecedented demand cuts.

“Even if an agreement to cut production is reached, which will surely give a short-term boost to prices, we believe that enthusiasm will at some point subside and the reality of the magnitude of demand imbalance will eventually hit the market”, says Rystad Energy.

At the last OPEC meeting in early March, Saudi Arabia offered cuts of 1.5 million barrels per day to combat falling demand. After Russia rejected the proposal, a market share battle broke out between Riyadh and Moscow.

Oil market forecasts have changed dramatically since early March due to the spread of the pandemic and the price war. Oil prices have fallen to their lowest levels in nearly two decades. Market values ​​of the WTI and Brent varieties fell by more than 50% in March, marking the worst month in their history. The first quarter was also the worst in the history of varieties, with the price of WTI falling by 66% and that of Brent by 65%.

Amid a recession that has put pressure on US oil companies, President Donald Trump has tried to mediate a deal between Saudi Arabia and Russia. On April 2, Trump told that he had spoken with Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman and expected them to announce a record cut in production.