The price of a West Texas Intermediate barrel of oil shot up on Wednesday afternoon by nearly 7% shortly after OPEC's President gave the market fresh optimism about tomorrow's virtual OPEC++ meeting.
"The meeting will undoubtably be fruitful in order to rebalance the market through measures we will take tomorrow," Mohamed Arkab, OPEC's President and Algeria's Energy Minister told state news agency APS, according to Reuters.
While an intangible statement, the optimistic words spoken by the OPEC President seem to be just what the doctor ordered for the volatile markets as speculators try to make the most out of the oil-price plunge.
As a result of today's spike, trading of the biggest oil ETF, the United States Oil Fund (USO), had been halted temporarily. Trading of the USO has since resumed. The USO is trading up 4.03% as of 3:03pm EDT.
All eyes remain on the potential deal that OPEC group may come up with tomorrow in what could be the largest oil production cut deal ever. Signatories to the deal could include, in addition to OPEC, Brazil, Norway, Canada, and all the OPEC+ countries that signed onto the previous deal. While some are hoping that the United States may join in the cuts, a formal agreement between the US and other oil producers appears unlikely.
Saudi Arabia and Russia, together responsible for producing more than 22 million barrels per day, are expected to make or break the chances of a production cut deal.
A 10 million bpd figure has been discussed by meeting attendees in the run-up to the meeting, although that figure would be insufficient to offset the loss in oil demand that the market has seen due to the coronavirus.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. More