Brent crude oil futures have increased above $30 a barrel, reversing loss in early European trading on Friday.
According to Reuters, Brent crude LCOc1 futures rose by $2.10, at $32.04 per barrel by 0748 UTC. This 7% rise was not reflected in US West Texas Intermediate (WTI) prices, which increased by 1%. The price of WTI crude increased by $0.28, to $25.6 a barrel.
US President Donald Trump said he had spoken with both Saudi Crown Prince Mohammed bin Salman and Russian President Vladimir Putin. He said he expects both would cut oil output by as much as 10m to 15m barrels per day (bpd).
According to analysts, even if Russia and Saudi Arabia agree to cut production by as much as 15m bpd, it would not be enough to balance the market in face of a deep economic recession caused by the Covid-19 pandemic.
Reuters quoted Goldman Sachs as saying: “Even if a deal was to be reached, we believe the coordination required would lead to an only delayed and gradual implementation.”
Analysts said Riyadh and Moscow will look for other countries’ participation, especially from the US.
ING said in a note: “It is difficult to see the current OPEC+ group cutting output by at least 10m bpd – the scale of the reduction would be just too much for the group to handle.”
Meanwhile in Canada, Alberta Premier Jason Kenney told Reuters his province is open to joining potential global oil cut deal.