Trump says he expects Saudi-Russia oil production deal in coming days

Andrew Cummings
April 2, 2020

"I think they're going to make a deal".

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

In addition, Saudi Arabia said it would grow its output by 30 percent to 12 million barrels per day by end-April in a bid to wrest market share from Russian and U.S. competitors.

Oil rounded off its worst quarter by the end of March as prices plunged 70 per cent from the start of the year, even as US President Donald Trump attempted to broker talks between Saudi Arabia and Russian Federation.

Speaking at a government meeting on Wednesday, Putin said that both oil producers and consumers should find a solution that would improve the "challenging" situation of global oil markets.

A producer pact to rein in oil production expired on Tuesday, removing restrictions on output by members of the Organization of the Petroleum Exporting Countries, as well as Russian Federation and other producing nations.

Oil tanks around the world could fill in six weeks, a move that will likely force significant production shut-downs, Standard Chartered analysts including Emily Ashford wrote in a report.

Trump earlier indicated that he was concerned about the impact of low oil prices on the American petroleum industry.

With oil prices at the lowest in almost two decades, Secretary of State Michael Pompeo last week directly asked the kingdom to "rise to the occasion and reassure" the energy market, diplomatic language for ending the oil price war. The announcement, interpreted in the market as an oil price war, sent Brent and West Texas Intermediate crudes tumbling. The leaders agreed that their energy ministers should begin consultations on the oil market, but Peskov wouldn't say when those contacts might begin.

Prices for lighter Saudi grades could fall more than the heavier ones due to weak naphtha and gasoline margins and an ample supply of light crude globally, the respondents said. The price of crude oil plunged as demand for energy was hit by the coronavirus pandemic.

Some of the refining sources also pointed to the wide discounts for competing supplies such as Russia's Urals crude and U.S. Mars crude as a reason for Saudi to cut prices.

Other reports by iNewsToday