Canada and U.S. in 'close contact' amid oil price rout, Freeland says

Canada has been in "close contact"with the United States about the oil price shockthat's batteredNorth America'senergy sector,Deputy Prime Minister Chrystia Freeland said Thursday.

But Freeland didnot say whether Canada wouldconsiderparticipating in a global co-ordinated effort to curb oil production if such an agreement were proposed.

"Let me just say that this is a very fast-moving situation," she told reporters. "The current situation in the global energy markets is something that we're very concerned about."

Freeland said it'stoo early to say how thesituation will develop, but added, "we're very closely engaged."

She also said Canada has been in "very close contact" with the United States.

Her comments came the same dayU.S PresidentDonald Trump said he had brokered a deal with topcrude producers Russia and Saudi Arabia to reduceoutput.

• Oil price jumps 25% to $25 a barrel as Trump talks up deal between Saudis and Russia

Trump said the two nations could cut output by 10 to 15million barrels per dayan amountrepresenting 10to 15 per centof global supply, and one that wouldrequire the participation of nations outside of OPEC and itsallies.

Russia and Saudi Arabia have been at odds since early March,when the two nations failed to agree on a deal curbing output asthe coronavirus spread around the globe.

Watch:Deputy Prime Minister Chrystia Freelandoncoordinated oil production cuts:

Freeland asked if Canada supports coordinated oil production cuts

4 years ago

Duration 2:48

Deputy Prime Minister Chrystia Freeland spoke with reporters on Parliament Hill on Thursday.

The pandemic hasworsened since, freezing economic activity and sending oil prices into a tailspin.

Global oil demand is expected to fall by about 30 millionbarrels per day in April, or about one-third of daily consumption. The immense decline in demand sent oil prices to theirlowest levels since 2002.

Saudi Arabia called Thursdayfor an emergency meeting of OPEC and non-OPEC oil producers, aninformal grouping known as OPEC+, state media reported, sayingit aimed to reach a fair agreement to stabilize oil markets.

• 'It's going to be very difficult and very painful': Oilpatch begins layoffs and oil production cuts

One source with OPEC+ told Reuters thatinitial talk among the group was abouthow other large producers such as Canada and Brazil would needto join in any co-ordinated output cuts.

Many Canadian oil producers have already slashed their spending plans for2020. Production cuts have followedas storage capacity fills up.

Freeland told reporters Thursday morning she was aware of the reports regarding OPEC.

"We have been concerned for some time about the ways in which the actions of Russia and Saudi Arabia have disrupted the world energy market," she said.

"That has had grave consequences for the Canadian energy sector and for the Canadian economy more broadly. And that is something we are really focused on.

"Canada has been in very close contact with the United States about this issue."

Freeland said she has spoken with U.S. Secretary of State Mike Pompeo. She's also been talking to AlbertaPremier Jason Kenney, whom she spoke with Wednesdaynight about "many things," includingthe global energy market.

She saidKenney's conversations with U.S. officials havealso have been "very helpful."

Speaking before the legislature in Edmonton, Kenney said he'sbegun discussions with members of the U.S.Congress, state governors and major energy producers about the prospect of a co-ordinated North American energy policy.

Such a policy wouldmitigate the damage of predatory dumping, he said, pointing a finger atRussia, Saudi Arabia and OPEC.

"Elements of such a co-ordinated policy could include a co-ordinated Canadian-U.S. import tariff on foreign oil," he said.

"Another policy that we must be open to would be a co-ordinated forum of production curtailment across North America."

Alberta curtailed oil production last year in a bid to clear a regional oil glut. He said further curtailment by Alberta alone to address the current price slump would be pointless if Americarefused to do the same.