Oil prices surge after Trump says he expects Saudi Arabia and Russia to end their price war and reach a deal

Trump spoke to leaders in both countries as global demand for oil continues to evaporate while much of the world is in lockdown.
The Saudi Arabia-Russia pact is expected to scale back a supply surge which led to U.S. oil reaching an 18-year low earlier this week.
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Oil prices rallied on Wednesday afterPresident Donald Trump said he recently spoke with leaders in Saudi Arabia and Russia to address concerns over their price war. Trump said he believed the two countries would make a deal within a few days. The deal is expected to lower production and bring prices back up.

Following Trump's comments, Brent crude oil jumped 10.11% to $27.16 as of 0822 GMT on Thursday, while U.S. West Texas Intermediate (WTI) crude rose 8.76% to $22.09.

Trump also said he had invited American oil executives to the White House to discuss revival measures which would aid the oil industry that is hurt by a slump in demand due to both the coronavirus outbreak and the price war.

The oil strategy meeting would include CEOs from Exxon, Chevron, Occidental Petroleum, Devon Energy, Phillips 66, Energy Transfer Partners and former Continental Resources CEO Harold Hamm, according to CNBC .

Both Saudi Arabia and Russia are in support of cooperation but there are no signs of a strategy shift as yet, according to Financial Times .

The kingdom of Saudi Arabia raised its oil production to its maximum level on Wednesday: above 12 million barrels per day, FT reported . The world's biggest oil exporter supports a deal for stabilization, but production cuts would have to be shared among all oil producers, including Russia, FT said citing people close to the kingdom.

Neil Wilson, chief market analyst at Markets.com, believes that talk of a truce in the oil price/ supply war is lifting sentiment, but he "cannot help but sense a dead cat bounce".

"Trump always claims he is close to a deal," said Wilson, in a morning note. "From what we can glean from the chatter, Russia is not raising output but the Saudis are not backing off and have increased output to record levels," he said.

Neil Wilson also said that in case of a truce, oil might rally a bit "but the pressure seems weighted to the downside and any supply deal will not be able to offset the collapse in demand."

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