<article><p class="lead">US energy secretary Dan Brouillette told his G20 colleagues today that US crude output could decline by as much as 3mn b/d as he encouraged Opec+ members to finalize a <a href="http://direct.argusmedia.com/newsandanalysis/article/2095531">tentative deal</a> to cut output by 10mn b/d for two months from 1 May.</p><p>"We estimate that by the end of this year, US production will see a reduction of nearly 2mn b/d," Brouillette said in his opening remarks. "Some models show even more dramatic figures, for example, up to 3mn b/d."</p><p>Unlike the production cuts expected of the Opec+ group, the declines touted by the US will materialize over time as a result of deep cuts to drilling budgets. Delegates attending the Opec+ meeting yesterday told <i>Argus</i> that Opec+ will recommend that countries outside the alliance, including the US and Canada, cut by around 5mn b/d in total for an unspecified period.</p><p>Brouillette said it was "disappointing" that "several countries were discussing an agreement to cut 10mn b/d out of the market, but the agreement never materialized."</p><p>Mexico held up the finalization of the agreement yesterday, balking at the request on Mexico to cut production by 400,000 b/d in May-June from a baseline of 1.75mn b/d. It proposed cutting by 100,000 b/d from its March 2020 level of 1.78mn b/d, energy minister Rocio Nahle said in a tweet.</p><p>Mexico's president Andres Manuel Lopez Obrador said today Mexico will cut production by 100,000 b/d, adding that US president Donald Trump has offered to reduce US crude output by an additional 250,000 b/d to compensate for Mexico's inability to do so.</p><p>"This we communicated late, immediately, this is already formalised – which is to say, we have handled this matter," Lopez Obrador said.</p><p>The White House did not immediately confirm whether Trump and Lopez Obrador spoke overnight.</p><p>An Opec delegate told <i>Argus</i> that the meeting did not discuss a split in the production commitment cut between Mexico and the US. It was not immediately clear if Mexico's proposal to distribute its quota was communicated to Opec following the conference.</p><p>Trump said yesterday, following phone conversations with Russian president Vladimir Putin and Saudi King Salman bin Abdulaziz, that Opec+ members were "close to a deal" and likely to make an announcement today.</p><p>The G20 ministerial discussion was expected to build on the presumed success of the Opec+ meeting, with the US, Canada and other producers highlighting "organic" declines in their output to assure state-controlled and state-owned producers they are not alone in addressing the supply glut. The US and other large consuming nations also prepared to offer to open their strategic petroleum reserves to absorb some of the excess production, even though no more than 85mn bl of crude storage is available across the OECD countries.</p><p>The G20 instead will focus on finalizing the Opec+ agreement.</p><p>Russian energy minister Alexander Novak in his G20 opening remarks called for "partnership and solidarity" and for a "balance of producers and consumers' interests."</p><p class="bylines"><i>By Haik Gugarats, Ruxandra Iordache and Anastasia Krasinskaya</i></p></article>
