The U.S. oil industry is divided on whether it could or should contribute to production cuts in an effort to stabilize prices.
The American Petroleum Industry opposes cuts, saying such a move would harm the U.S. industry. In Texas, however, Ryan Sitton, one of the three members of the Texas Railroad Commission, has said that the state would consider participating in such a deal.
OPEC has invited the Texas commission to participate in its June meeting, and Sitton said on Thursday that he spoke to Russian energy minister Alexander Novak about production cuts.
Oil producing states, like Texas, have the authority to manage production, though the federal government cannot manage production and a consortium of companies cooperating would be seen as an anti-trust violation. The Texas commission last restricted output in 1970. It has set a meeting set for April 14.
Despite last week's surge, West Texas Intermediate crude is still down nearly 40% in the last month on the heels of demand destruction from the coronavirus outbreak, and the price war between Saudi Arabia and Russia.
But some argue that some sort of deal will most likely be reached since it is in producers' best interest to have higher oil prices.
"It still looks like something will happen on the supply front," Vital Knowledge founder Adam Crisafulli said Sunday. "Saudi Arabia and Russia continue to publicly feud, but nearly every producer on the planet is pleading for action and even countries like Canada and Norway, which usually don't participate in global supply actions, now seem willing to contribute. It's unlikely 10M barrels come offline, but some sort of a curb seems very probable by the end of this week," he added.
But even if a deal is reached, many argue that prices will stay lower for longer due to the unprecedented demand destruction caused by the coronavirus. In other words, the supply side is a secondary story to the demand hit.
"Be prepared for another drop in oil prices soon, when market participants realize that the real issue they have to deal with is the declining demand oil demand, for which the proposed cuts, even if realized, are set to fail to bridge the gap," said Bjornar Tonhaugen, head of oil markets at Rystad Energy.
- CNBC's Patti Domm, Michael Bloom, Abigail Ng and Sam Meredith contributed reporting.
Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world.