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Oil prices up as focus shifts to OPEC, Russia meeting on output cuts

Thursday's meeting between members of the Organization of Petroleum Exporting Countries (OPEC) and its allies, including Russia, is widely expected to be more successful than their gathering in early March

twitter-logo Reuters        Last Updated: April 8, 2020  | 10:02 IST
Oil prices up as focus shifts to OPEC, Russia meeting on output cuts
"Saudi Arabia and Russia continue to hammer out a deal ... What is clear is that the United States must be involved," ANZ Research said in a note.

Oil climbed on Wednesday, reversing most of the prior session's losses, as investors pinned hopes on a Thursday meeting where OPEC members and allied producers will discuss output cuts to shore up prices that have tumbled amid the coronavirus pandemic.

Brent crude was up by 72 cents, or 2.3 per cent, at $32.59 per barrel by 0044 GMT after falling 3.6 per cent on Tuesday. US West Texas Intermediate (WTI) crude rose $1.30, or 5.5 per cent, to $24.93 a barrel after dropping 9.4 per cent in the previous session.

Thursday's meeting between members of the Organization of Petroleum Exporting Countries (OPEC) and its allies, including Russia, is widely expected to be more successful than their gathering in early March that ended in failure to extend cuts and a price war between Saudi Arabia and Russia amid slumping demand.

But doubts remain over the role of the United States in any production curbs.

Saudi Arabia, OPEC member countries and Russia are likely to agree to cut output, but that accord could be dependent on whether the United States would go along with cuts. The US Department of Energy said on Tuesday that US output is already declining without government action.

"Saudi Arabia and Russia continue to hammer out a deal ... What is clear is that the United States must be involved," ANZ Research said in a note.

US crude production, meanwhile, is expected to slump by 470,000 bpd and demand is set to drop by about 1.3 million bpd in 2020, the US Energy Information Administration (EIA) said on Tuesday.

Also read: Coronavirus effect: Oil slumps on weak demand, doubts over output cuts

Also read: Coronavirus India Live Updates: Maharashtra reports another COVID-19 death in Pune; country's toll at 149

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