Trump Says He May Join Possible Saudi-Russia Talks On Oil's Slump

Carla Harmon
April 3, 2020

In a tweet on Thursday, Mr Trump said, "Just spoke to my friend MBS (Crown Prince) of Saudi Arabia, who spoke with President Putin of Russian Federation, & I expect & hope that they will be cutting back approximately 10 million barrels, and maybe substantially more which, if it happens, will be GREAT for the oil & gas industry!".

Peskov declined to comment when asked if the two leaders had discussed Saudi Arabia during their call.

Following Trump's press briefing, Rystad Energy's head of oil markets, Bjornar Tonhaugen, told Rigzone that, "at best", the company believes Russian Federation and Saudi Arabia will agree to continue discussing and monitor the market situation.

Brent soared as much as 47% during the session, its highest intraday percentage gain ever.

Trump tweeted that he spoke to his "friend" - Prince Mohammed - and that he expects "they will be cutting back approximately 10 Million Barrels, and maybe substantially more which, if it happens, will be GREAT for the oil & gas industry!"

Exactly what arrangement had been reached between Riyadh and Moscow was unclear, but oil prices shot up after Trump's tweet, along with the stock market, which as of 1 p.m. was up nearly 2 percent - on a day when the Labor Department reported that new unemployment claims from the previous week had exceeded 6 million, an order of magnitude above even the levels of the 2009 financial crisis.

The cost of crude had fallen to 18-year lows as the two countries slashed prices and ramped up production. WTI slumped below $20, having lost around 65 percent of its value in the first quarter.

With fuel demand expected to fall by 20% to 30% in coming months, pressure was building on oil producers to reach a deal, and Trump expressed growing frustration about the crude price and its effect on the energy industry.

The Canadian dollar traded for 70.74 cents USA compared with an average of 70.34 cents U.S. on Wednesday.

"It sounds too good to be true", said Per Magnus Nysveen, head of analysis for the Norwegian firm Rystad Energy.

Analysts meanwhile said the market remained hobbled by sliding demand because of business shutdowns, the grounding of air travel and other social distancing measures put in place to contain the deadly COVID-19 outbreak.

Shale producer Whiting Petroleum, which was once the largest oil producer in the USA state of North Dakota, filed for bankruptcy on Wednesday.

"This would help drillers store excess crude", it said.

ANZ Bank however said that U.S. prices were being bolstered also by reports that the United States energy department may rent space in the country's emergency oil reserves to local producers.

Other reports by iNewsToday