President Trump Says Saudi Arabia, Russia Ready to Cut 15 Million Bpd

WASHINGTON (Reuters) — U.S. President Donald Trump on Thursday said he had spoken to Saudi crown prince Mohammed bin Salman and expects Saudi Arabia and Russia to cut oil output by as much as 15 million barrels per day, as the two countries signaled willingness for a deal. 

In a pair of tweets, Trump initially said the cut would be about 10 million barrels a day, before later raising the figure.

Even though no date has been set for such a meeting — and no deal on cutting production has yet been announced — the oil market saw its largest jump in several days.

Brent oil prices rose 21% to $29.94 per barrel, having earlier risen to as high as $36.29. U.S. benchmark WTI crude settled up 25% to $25.32 a barrel. 

"If it happens," the Republican U.S. president wrote on Twitter, it "will be GREAT for the oil & gas industry!" 

Oil markets plunged in March as the production feud between Saudi Arabia and Russia intensified as global demand plunged due to the coronavirus pandemic shuttering many economies. 

The Organization of Petroleum Exporting Countries (OPEC) and allies including Russia had cut production for more than three years to bolster prices, but that deal ended in early March after Russia and Saudi Arabia were unable to come to an agreement to further curb output as the coronavirus outbreak worsened worldwide. 

The Saudis said they would boost oil production to an all-time record. That, along with the pandemic, caused worldwide prices to drop to nearly $20 a barrel, losing more than two-thirds of its value so far this year.

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

A cut of 10 million to 15 million barrels per day would be nearly impossible by OPEC countries alone, but in the last several days, Texas regulators have weighed cutting output, and oil companies there have pressed the White House to act.

Ryan Sitton, one of three elected oil-and-gas regulators in Texas, tweeted on Thursday that he had spoken with Russia's Novak about a cut of 10 million bpd in global supply. 

"While we normally compete, we agreed that #COVID19 requires unprecedented level of int'l cooperation," Sitton wrote.

Even with Thursday's surge, Brent is still less than half its $66 closing level at the end of 2019.

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