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U.S. President Donald Trump and Russian President Vladimir Putin discussed via phone the OPEC+ production cut agreements on Monday, according the Kremlin.
The discussions included acknowledgement that the current OPEC+ production cuts, of which Russia is a part, would “lead to a gradual restoration of oil demand and price stabilization,” the Kremlin said. Further details of what was discussed with regards to the oil markets was not disclosed.
Other topics of conversation between the two presidents were the launch of the Crew Dragon, and Russia’s possible inclusion in a G7 summit—which could draw European criticism after Russia was kicked out of the G8 after the annexation of Crimea.
OPEC and Russia have also discussed the OPEC agreement over the last couple of days—specifically the parties have been discussing the possibility of extending the production cut agreement by another month or two, although nothing has been finalized. Last week, reports surfaced that Saudi Arabia was pushing for an extension through the end of the year. Russia, meanwhile, is more in favor of gradually easing the production cuts, which are set to expire at the end of June.
The United States has done its part in cutting oil production as well, although not in any concerted effort with OPEC. Rather, oil production has dropped from 13.1 million bpd in the middle of March to just 11.4 million bpd as of week ending May 22.
The call came as oil prices have rallied somewhat over the last couple week as data emerged showing OPEC’s fairly robust performance in cutting oil production, along with the United States. Brent crude was up 1.90% on Monday afternoon at $38.56, with WTI rising 0.23% at $35.57.
But while prices have rallied from negative figures seen in April, U.S. shale would still find it hard—if not impossible—to turn a profit at $35 per barrel.
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.