Saudi Arabia and Russia agreed in principle on Thursday to lead a coalition of 23 countries to massive cuts in oil production after a month-long conflict and a drop in demand due to the coronavirus crisis that devastated oil prices. But after more than 11 hours of negotiations, Mexico abruptly withdrew from the negotiations, putting a final pact at risk.

Delegates said the talks would continue at a Group of 20 energy ministers meeting scheduled for this Friday.

Prices skyrocketed before the announcement by Saudi Arabia and Russia, before abruptly losing momentum and reversing course. The price of WTI, the US reference crude oil, for delivery in May, ended down 9.3%, at US $ 22.76 per barrel.

Two of the world's largest oil producers joined a coalition of other countries via teleconference, seeking a solution to the global oil surplus. The meeting includes representatives from 13 countries of the Organization of the Petroleum Exporting Countries (OPEC), 10 countries led by Russia and several other oil producing countries.

For Saudi Arabia, production limits will involve reducing the current production level of 12 million barrels by 3.3 million barrels per day, while Russia has agreed to cut 2 million barrels per day from its current production of 10 , 4 million barrels daily.

Most delegates agreed to cut production by 10 million barrels a day in May and June, OPEC said in a press release. They would continue to curb 6 million barrels a day until April 2022, the document said.

But the group said the deal remains "conditional on Mexico's consent".

At the end of Thursday's process, Mexico, a member of the alliance, refused to participate in the cuts, putting the deal at risk, they said.

Mexican officials believe that stronger players in the oil market, such as the United States, Russia and Saudi Arabia, should reduce more than Mexico, an oil official in that country said. But as a compromise, Energy Minister Rocío Nahle said that Mexico had proposed a reduction of 100,000 barrels per day for the next two months.

Saudi Arabia's energy minister, Prince Abdulaziz bin Salman, said at the meeting that there would be no final agreement without resolving the Mexico issue and negotiations will continue at the G-20 meeting on Friday, delegates said. "No agreement without Mexico, the Saudi prince said in a loud and clear voice," according to one participant in the conference call.

Even with the deal almost concluded, investors remained concerned that the cuts were not enough to sustain higher prices in the coming weeks, as global blockages put pressure on demand for gasoline, diesel and jet fuel. The restrictions will reduce some problems in the oil markets, "but, in a sense, it is too little, too late for this month, due to the collapse of demand. The boats are loaded, the pipelines are full and the refineries are cutting deliveries" said Saad Rahim, chief economist at commodities firm Trafigura.

Global oil consumption is about to drop by almost 35 million barrels a day in April, according to Rahim.

As the coronavirus outbreak moves around the world and leads to travel restrictions and work stoppages, oil consumption is expected to decline by up to 30 million barrels per day this month.

"The fundamentals of supply and demand are horrible," said OPEC Secretary-General Mohammed Barkindo. He said the decline in the second quarter would be "close to 12 million [barrels per day] and expanding", which is "unprecedented in modern times".

During the video call, Russian Energy Minister Alexander Novak said that only coordinated actions by OPEC, Russia and other countries would achieve results, as demand for oil has declined and stocks are flooding the world.

The market's quiet reaction came in this context.

"Perhaps the market is betting a little more on the volume than announced," said Bjornar Tonhaugen, head of the oil market at consultancy Rystad Energy. "There is also a lack of details when it comes to the basic level and whether the agreement depends on the cooperation of other nations outside OPEC +."

Saudi brakes would be the biggest ever, said Bob McNally, a former White House consultant. They would be the largest in an extended period since the 1980s, when European and North American rivals flooded the market and their production fell by 6.5 million barrels a day.

Russia and Saudi Arabia expect the US to participate in production restrictions. But his current plan calls for up to 4 million barrels a day of reduction from outside his alliance. So far, the Trump administration has refused to formally participate in any cuts. President Trump said the reductions will occur because of the erosion of oil demand due to the coronavirus.

Trump said he spoke to Russian President Vladimir Putin and King Salman of Saudi Arabia on Thursday. He said the three leaders had "a great conversation" about oil production, adding that they want to avoid layoffs in the oil industry, both in the US and abroad.

"We had a very good conversation. Let's see what happens," Trump said at a press conference at the White House. He said he believed Russia and Saudi Arabia were close to an agreement, but gave no details. The president did not say whether the United States would appeal to American companies to cut production.

OPEC is expected to announce a deal concluded Friday or Saturday, according to Trump. The Saudi and Russian leaders "were doing very well" during the conference, he added. He predicted that oil prices have already "hit rock bottom" and "are probably rising".

On Thursday, Brent oil, a world reference, fell 4.1% to $ 31.48 a barrel.

Many American producers welcomed the deal, which they hope can halt the drop in oil prices. "It is a good and necessary first step towards restoring the sanity of global markets," said Harold Hamm, a friend of Trump and founder of Continental Resources Inc., an independent producer of shale oil. "We hope this signals the recognition that dumping excess oil on the US market is a lost proposition for everyone involved."

Thursday's early agreement effectively ends a hard-hitting oil price war between Saudi Arabia and Russia, which saw oil prices drop 55% in March.

Early last month, Saudi Arabia cut its oil prices and said it would increase production to record levels after negotiations with Russia to respond to the collapse after the coronavirus outbreak. The effort was an attempt to gain market share from Russia. But a subsequent defeat of oil, which has raised prices to levels never seen in 17 years and has hurt many U.S. shale producers.

Saudi Arabia and Russia are waiting for positive signals from a virtual conference of the G-20 countries scheduled for Friday. The main oil producers, such as the USA, Canada and Brazil, should participate. Texas regulators - the largest oil-producing state in the U.S. - are also expected to debate on April 14 whether they will force companies to cut production.

Instead of the usually crowded room at OPEC's headquarters in Vienna, the meeting was virtual to respect the social detachment precautions that have become the norm.

In Vienna, Barkindo saw Russian Energy Minister Alexander Novak speak on a flat-screen TV. In Tehran, Iranian oil minister Bijan Zanganeh entered his office with a team of masked workers.