U.S. President Donald Trump held a phone call with Russian President Vladimir Putin and Riyadh's King Salman following the OPEC+ discussions on a deal for new oil cuts on Thursday, where they confirmed their wish to coordinate moves on stabilizing oil markets. 

"They are getting close to a deal. That's OPEC and many other countries outside of OPEC. They will probably announce something either today or tomorrow," Trump said at a White House briefing on Thursday. 

Brent oil prices, which hit an 18-year low last month, were trading around 32 U.S. dollars a barrel on Thursday, half their level at the end of 2019. 

It is reported that Mexico has withdrawn from the OPEC+ negotiations without agreeing to sign a new oil output cut deal, but the OPEC+ countries continued the talks and hoped to persuade Mexico to return to the deal on Friday. 

OPEC+ formulates a two-year oil cut deal

The OPEC and its allies, meeting by video conference on Thursday, agreed to slash output as they buried differences in an effort to lift the market from a pandemic-driven collapse.

They have the outline of a deal to cut production by 10 million barrels a day, delegates said. Importantly, Russia has agreed to make deep cuts, the delegates said.

The first phase will gradually reduce the production of 10 million barrels of crude oil per day in May and June this year. The production reduction agreement is valid for two years, and the subsequent production reduction plan will be gradually implemented.

Oil prices pared gains, trading up 1.6 percent in London at 33.37 U.S. dollars a barrel as of 4:13 p.m. local time. That reflects concern that the volume of cuts being discussed equates to just a fraction of the demand loss, which some traders estimate at as much as 35 million barrels a day.

An agreement from OPEC+ and a broader alliance including America is crucial to reviving prices that have sunk to an 18-year low. Not only oil companies, but entire oil-dependent economies need the market to rebound if they're to balance ailing budgets. 

Friday's Group of 20 talks will provide the forum for U.S. President Donald Trump to respond to OPEC+'s agreement. The Kremlin has insisted that America must do more than just let market forces reduce its own record production. Trump, meanwhile, has said his country's cut will happen "automatically" as low prices put the shale patch in dire straits. 

If OPEC+, the U.S. and other producers can cement an agreement at the G20 meeting, the curbs would dwarf any previous market interventions. That's something that the physical market for crude trade in actual cargoes rather than futures contracts needs immediately, but it won't match losses from the unprecedented slump in demand.

(With inputs from Bloomberg)