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Following US President Trump’s earlier tweet that he had discussed oil prices with Saudi Arabia’s Crown Prince, Texas Railroad Commissioner Ryan Sitton reports that he discussed with Russian Energy Minister Alexander Novak the prospect of taking 10 million barrels per day off the global oil markets.
“…we agreed that #COVID19 requires unprecedented level of int’l cooperation,” Sitton’s tweet read in part.
Sitton mentioned that he looked forward to talking with Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman soon as well.
Russia and Saudi Arabia’s failing cooperation in the OPEC+ agreement have resulted in increased production from OPEC, with both Saudi Arabia, the UAE, Kuwait, and Russia promising to increase production. Saudi Arabia has previously reported that it has increased its oil production to more than 12 million bpd.
The extra barrels on the market coincided with the Covid-19 pandemic, which destroyed global oil demand, pushing down oil prices to levels not seen in years.
Oil prices were trading up more than 20% on Thursday afternoon following the positive oil market developments, with WTI crude trading at $24.80 (+$4.49), and Brent crude trading at $30.02 ($5.28). Oil prices had been up even more immediately following President Trump’s tweet, but prices have since fallen back somewhat.
Several analysts have suggested that any OPEC action would be too little, too late, with demand unlikely to snap back anytime soon due to the pandemic. A 10 million bpd cut, however, would go a long way to stabilizing the oil market.
The Saudi Press Agency earlier on Thursday confirmed that it had called an urgent meeting for OPEC+ and other states to discuss the oil markets and the coronavirus response. Details on the timing of the meeting, however, have not been disclosed.
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.