Oil Spikes After Trump Talks Up Saudi-Russia Supply Truce

By Glenn Dyer | More Articles by Glenn Dyer

Oil prices had their best day on record (two days after experiencing the biggest quarterly slide on record) after President Donald Trump said he expected Saudi Arabia and Russia to cut output by as much as 10 million to 15 million barrels a day.

US President Donald Trump on Thursday said on Twitter that he had spoken with the crown prince of Saudi Arabia, Mohammed bin Salman, who in turn had spoken with Russian President Vladimir Putin. “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!”

Those claims saw the May US West Texas Intermediate crude in New York surge 30% at one stage before they fell back to be up 24.67% at a settlement at $US25.32 a barrel, for its largest single-day percentage gain in history.

In Europe, the international benchmark June Brent crude jumped 17.8%, or $US4.40, to trade at $US29.14 a barrel.

Trump told CNBC’s on Thursday that he spoke to President Putin yesterday and Saudi Crown Prince Thursday and expects them to announce an oil production cut of 10 million barrels and could be up to 15 million.

Saudi Arabia called on Thursday for an urgent meeting of the Organization of the Petroleum Exporting Countries and other oil-producing countries with the “aim of reaching a fair agreement to restore” balance in the oil markets.

The Saudis said in a statement that they were acting to support the global economy and in “appreciation” of Mr. Trump’s request.

But the New York Times reported “ The Kremlin denied that Mr. Putin had spoken to the Saudi crown prince, as Mr. Trump had said in his Twitter message. “No, there was no conversation,” Dmitri S. Peskov, spokesman for Mr. Putin, told the Interfax news agency.”

Trump would be taken more seriously by markets if he managed to get US oil producers to cut their current 13 million barrels a day output in tandem with cuts from OPEC.

Traders pointed out that the gains eased in late and after-hours trading as doubts about Trump’s claims seeped into the market. The price was under $US25 a barrel in early Asian trading

Glenn Dyer

About Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

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