Economy

Coronavirus: Oil prices rise on hopes of a price war truce

Coronavirus: Oil prices rise on hopes of a price war truce”

Demand for products made from crude oil, such as gasoline and jet fuel, has plummeted as COVID-19 forced states across the country to issue "stay-at-home" orders.

Well, actions speak louder than words. "With the transport cost it means that the price is negative", Per Magnus, head of analysis at Rystad Energy, told AFP.

Oil industry sources in the kingdom said that the country's leadership was now in favour of working with other oil producing nations to reduce output, in an effort to boost prices by creating scarcity.

Trump, who is scheduled to meet with USA oil executives on Friday, did not say there was a definitive deal between Saudi and Russian Federation but said he expected and had "hope" for the cut.

Meanwhile, Mr Trump will reportedly meet the bosses of major energy companies, including Exxon Mobil and Chevron, at the White House on Friday.

Russia's refusal in early March to cut production triggered the oil price war, with the kingdom responding by increasing its output to a record high, above 12 million barrels a day.

More news: COVID-19 cases will soon reach 1m globally, 50,000 deaths

The American Petroleum Institute, which represents the USA oil and gas industry, said its president Mike Sommers would attend the initial meeting, but added: "We are not seeking any government subsidies or industry-specific intervention to address the recent market downturn at this time".

The API, many of whose members operate globally, has said in the past it opposes trade tariffs because it can complicate projects and business relationships in other countries. The administration has since announced it will temporarily ease some environmental enforcement.

Earlier, Kremlin spokesman Dmitry Peskov refuted US President Donald Trump's claims about a phone conversation between Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman.

They also agreed to have their top energy officials discuss slumping global oil markets.

Saudi Arabia's oil supply shot up to more than 12 million barrels per day (bpd), industry insiders and global media outlets reported, giving rise to the fears of an imminent price war.



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