Oil prices tick up on hopes of Russia-Saudi deal
Oil prices have begun to rebound after dipping to their lowest level in 18 years amid the coronavirus outbreak and a trade war.
Crude prices were up 12 percent Friday following an announcement from President Trump that sparring Russia and Saudi Arabia may consider curbing their oil production by up to 15 million barrels, a move that would begin to dent the oversupply in the market.
Oil prices were at $27 a barrel as markets opened and have been steadily rising since hitting a low point of $21 on March 23 — a more than 50 percent decline from $50 a barrel prices seen in February.
OPEC leaders are set to meet Monday to discuss the deal Trump floated.
“Just spoke to my friend MBS (Crown Prince) of Saudi Arabia, who spoke with President Putin of Russia, & 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!” he tweeted Thursday, referring to Saudi Crown Prince Mohammed bin Salman.
“Could be as high as 15 Million Barrels. Good (GREAT) news for everyone!” Trump added.
Kremlin spokesman Dmitry Peskov, however, denied Russian President Vladimir Putin spoke with the Saudi prince.
He told the Financial Times that “there was no conversation” between the two.
The Trump administration has tried to assist the struggling oil industry throughout the epidemic, but it’s efforts to boost oil sales by filling the government’s Strategic Petroleum Reserves fell flat when Congress failed to include the needed $3 billion in the coronavirus stimulus package.
With the coronavirus leaving much of America sticking close to home, demand for gasoline has crashed, leaving questions as to where companies may store oil being produced more quickly than it’s being used.
Oil producers have suggested they may need to cut production, temporarily shutting wells in order to pause production while prices are low.
The difficult financial times are likely to sink small producers.
The Department of Energy announced Thursday it would rent its storage space to oil companies.
Copyright 2023 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.