Oil producers are racing to finalise a deal to cut output by about 10% in an effort to stabilise plunging prices due to coronavirus lockdowns.
Oil producers group Opec and allies on Thursday said they had agreed to reduce supply, but the deal was cast in doubt after Mexico baulked at the cuts.
Mexico later said it would move forward, thanks to a deal with the US to help shoulder the reductions.
US President Donald Trump said he had proposed to “help Mexico along”.
He said the US would reduce its output and Mexico would “reimburse” the US at some later date. He added that he wasn’t sure the deal would be accepted.
“We’re working on it. I think eventually it’s going to work out,” he said.
Oil markets were closed on Friday, as G20 energy ministers held talks to finalise the agreement.
But the prospect of cuts had failed to boost prices a day earlier, with many analysts saying they would do little to offset the massive drop in demand as the coronavirus pandemic has grounded planes, halted travel and put a brake on industry across the world.
‘Reduce the surplus’
In prepared remarks at the G20 meeting, US Energy Secretary Dan Brouillette called the situation “dire” and made worse by the price war between Russia and Saudi Arabia, after Russia would not join a plan to cut supply last month.
Mr Brouillette said America would “take surplus off the market” by storing “as much oil as possible” and predicted a fall in US output, pointing to the struggles low prices have created for US companies. But he did not promise specific reductions.
“We call on all nations to use every means at their disposal to help reduce the surplus,” he said.
Government-directed supply cuts would be highly unusual in the US.
However, on Friday, Mexican President Andres Manuel Lopez Obrador said Mr Trump had spoken to him on Thursday and suggested the US would help its neighbour with the cuts.
Mr Lopez Obrador said the US would make 250,000 barrels per day in additional cuts to its oil output, allowing Mexico to cut just 100,000.
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