The U.S. will cut its oil output by at least four million barrels per day (mbpd) in the next three months, according to the Texas Railroad Commissioner on Wednesday.
'I'm not participating in the OPEC+ call tmrw [Thursday] but if I were I'd say at least 20 million barrels per day in cuts are needed & the U.S. will cut at least 4 mbpd in next 3 months organically,' Ryan Sitton said on Twitter.
His remarks came the day before the teleconference between oil-producing member countries of OPEC+ to discuss the low price environment and the supply-demand balance in the global oil market.
Sitton also warned that 'if nothing is done' in the expected OPEC+ deal on Thursday, that inventories would fill up in two months, which means, Sittion added, 'the world will need to cut as much as 30 mbpd.'
The Texas Railroad Commission is the U.S. agency that regulates the oil and gas industry, gas utilities, pipeline safety, safety in the liquefied petroleum gas (LPG) industry, surface coal and uranium mining.
Meanwhile, citing an official source from the Russian energy ministry, Interfax news agency said Russia is ready to participate in an oil pact deal to reduce its share of oil output to stabilize prices.
The source said Russia might reduce production by about 1.6 million barrels, or 14%, from the level of the first quarter when the country mined 11.3 million barrels per day (bpd), according to data of the Central Dispatching Department of Fuel Energy Complex (CDU TEK).
Iran's Oil Minister also said OPEC and non-OPEC members should first agree on basic production rates for each producer country before Thursday's meeting, the semi-official Mehr news agency reported.
Due to the rapid spread of coronavirus (COVID-19), weak economic activity around the world has lowered global oil demand, increasing the glut of supply in the market.
Saudi Arabia-led OPEC and Russia-spearheaded non-OPEC failed on March 6 to lower their collective output, causing a massive plummet in prices, which fell on March 30 to their lowest level since 2002.
On Thursday at the teleconference, the OPEC+ group is expected to agree to lower their collective oil production level by between 10-15 million barrels per day to trim some of the oversupply.
By Sibel Morrow