/ Photo taken on November 26, 2018 / REUTERS / Donna Carson
Oil soared on Friday, extending the gains of the best day on Thursday after OPEC and its allies announced that they would meet on Monday to discuss a reduction in production amid the coronavirus pandemic, according to Reuters.
US crude West Texas Intermediate jumped 13% to $ 28.56 a barrel after gaining 25% on Thursday. International benchmark Brent crude jumped 17% to $ 34.91 a barrel to its Friday high, continuing the gain of 21% from the previous day.
The cut could represent around 10 percent of global supply, Reuters reported on Monday, citing an OPEC source. The meeting to discuss a potential production cut deal came after President Donald Trump told CNBC on Thursday that he expected Saudi Arabia and Russia to announce a deal to cut production significantly of oil.
Oil prices plummeted during the coronavirus pandemic, which has significantly reduced demand as airlines cancel flights and people are encouraged to stay home to slow the spread of COVID-19. In addition, a price war broke out between Saudi Arabia and Russia after the countries failed to agree on production cuts.
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The two sides have pledged to significantly increase oil production from April, which could have resulted in a glut of global supply.
The energy sector has been hit hard by falling oil prices, threatening companies with high debt levels. On Wednesday, American shale producer Whiting Petroleum became the first to declare bankruptcy amid the coronavirus pandemic and the oil price war.
Even with this week’s earnings, WTI and Brent are down about 50% from the start of the year.
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