Evan Vucci / AP
- Oil prices jumped 35% on Thursday after President Donald Trump said he expected Saudi Arabia and Russia to reach an agreement that could end their price war and possibly ease a brutal collapse in prices.
- Trump said he has spoken to leaders of both countries as global demand for oil continues to evaporate while much of the world is stuck.
- A pact between Saudi Arabia and Russia is expected to reduce a supply surge that led US oil to an 18-year low earlier this week.
- Watch the live oil trade here.
Oil rebounded strongly on Thursday after President Donald Trump says he expected Saudi Arabia and Russia will cut oil production to save the drowning oil and gas industry.
Brent crude oil jumped 47% to $ 36.29, while West Texas Intermediate crude rose 35% to $ 27.39 to intra-session highs. The resource began rallying on Wednesday after Trump first signaled a potential deal between Saudi Arabia and Russia.
Trump said on Wednesday that he believed a deal would be reached in a few days. Such an agreement should reduce production and drive up prices.
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Trump also said he invited US oil leaders to the White House to discuss measures to help the oil industry, which has suffered from reduced demand due to both the coronavirus epidemic. and the price war.
The oil strategy meeting would include CEOs of Exxon, Chevron, Occidental Petroleum, Devon Energy, Phillips 66 and Energy Transfer Partners, as well as former CEO of Continental Resources, Harold Hamm, according to CNBC.
Saudi Arabia and Russia have expressed support for cooperation among producing countries, but no change in strategy has been observed, the Financial Times reported.
Russia rejected Trump’s remarks on Wednesday and said talks with Saudi Arabia “did not start” and “were not planned,” the newspaper reported.
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Saudi Arabia increased oil production to its maximum level above 12 million barrels a day on Wednesday, the Financial Times said. The world’s largest oil exporter supports a stabilization deal, but production cuts should be shared among all oil producers, including Russia, the newspaper reported, citing people close to the kingdom.
Neil Wilson, the chief market analyst at Markets.com, said that while talking about a truce in the oil price and supply war raised sentiment, he “can’t help but feel a dead cat bouncing. “
“Trump still claims he is close to a deal,” Wilson said in a note. “From what we can glean from the chatter, Russia is not increasing production, but the Saudis are not backing down and have increased production to record levels. “
Wilson also said that in the event of a truce, oil may rally a bit, “but the pressure seems to be going down and any supply agreement cannot offset the collapse in demand.”
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