Coronavirus: Oil prices rise in hopes of a price war

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President Donald Trump chats from the newsroom with members of the White House coronavirus task force (April 1).

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World oil prices have risen after Donald Trump said he expected Saudi Arabia and Russia to reach an agreement soon to end their price war.

The cost of crude oil had fallen to its lowest level in 18 years, as the two countries lowered prices and accelerated production.

At the same time, demand has been hit hard by worldwide closings to slow the spread of the coronavirus.

US oil has just experienced its worst quarter ever, falling two-thirds in the first three months of the year.

Speaking on the dispute at a press conference in the White House, Trump said: “It is very bad for Russia, it is very bad for Saudi Arabia. I mean, it’s very bad for both. I think they’re going to make a deal. “

He added that he expected them to “work out in the next few days” after speaking to the leaders of the two countries.

In Asian trade, Brent crude oil rose more than 5% to more than $ 26 a barrel, while American oil rose about 4%.

Traders suggested that prices may also have been boosted by expectations that US producers of shale oil, whose production costs were relatively high, were under pressure to cut production.

“High debt levels could see some of these producers wiped out,” said Michael McCarthy, chief market strategist at CMC Markets.

The US oil industry, which Trump described as “devastated”, has just seen the first stock market victim of the collapse in oil prices.

Shaist producer Whiting Petroleum, which used to be the largest oil producer in the US state of North Dakota, filed for bankruptcy on Wednesday. The company said it had worked to cut costs and would continue to operate as part of a restructuring plan.

It happened when global demand for crude oil is expected to be nearly 23% lower this month than it was a year ago, according to research firm Rystad Energy.

Meanwhile, Trump would meet with bosses of big energy companies, including Exxon Mobil and Chevron, at the White House on Friday.

According to the Wall Street Journal, they will discuss a range of options that may include tariffs on oil imports from Saudi Arabia.

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