By Jeff Mason
WASHINGTON (Reuters) – President Donald Trump said on Monday that OPEC had not pressed him to ask U.S. oil producers to reduce their output to support global prices, which have been hard-hit by the economic fallout of the coronavirus pandemic.
Trump said U.S. oil production had already fallen, anyway.
“I think it’s happening automatically but nobody’s asked me that question yet so we’ll see what happens,” the president told a press briefing Monday afternoon.
Major oil producers including Saudi Arabia and Russia are likely to agree to cut production at a Thursday meeting but only if the United States joins the effort, three sources involved told Reuters on Monday.
“Without the U.S., no deal,” one of the sources said.
Worldwide oil demand has dropped by roughly 30%, or about 30 million barrels a day as the coronavirus pandemic brings the world economy to a standstill, at the same time that Saudi Arabia and Russia have been flooding markets with extra supply.
That has been a major problem for the economy of the United States, which has grown into the world’s largest oil and gas producer, because it has threatened the once-bustling drilling industry with layoffs and bankruptcies.
Several U.S. drilling companies have already scaled back production because of the drop in oil prices, which have lost around two-thirds of their value so far this year.
Last week, in response to the weeks-long market rout, the Organization of the Petroleum Exporting Countries and its allies including Russia, a group known as OPEC+, started talking about cutting production, but they want other non-OPEC nations to participate, particularly the United States.
The renewed discussions among members of OPEC+ began after Trump pressured Riyadh and Moscow to make a deal in a series of phone calls. Trump said last week he had made no concessions and did not agree to a U.S. production cut.
Normally any coordinated decision by U.S. oil producers to reduce output to boost prices would violate antitrust laws.
But if the federal government leads the charge such an effort would arguably be legal, according to Barbara Sicalides, an antitrust expert at Pepper Hamilton LLP.
(Aditional reporting by Diane Bartz; Editing by Richard Valdmanis, Sandra Maler and Sonya Hepinstall)
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.