Oil prices rise as tensions between Saudi Arabia and Russia deescalate
Brent crude surged above $30 on Friday amid signs that Saudi Arabia and Russia could end their feud and agree to make supply cuts to support oil prices.
Oil prices rallied above $30 a barrel on Friday as signs appeared that Saudi Arabia and Russia may end their feud and agree to cut supply to help stabilise the market.
US President Donald Trump weighed into the feud earlier this week in a bid to ease tensions between the two oil producing nations.
On Thursday, Trump tweeted ‘I expect & hope’ that Saudi Arabia and Russia will agree to cut supply by 10 million barrels ‘and maybe substantially more’.
Saudi Arabia is expected to call for an emergency OPEC meeting, while Russian energy minister Alexander Novak said that his country is open to re-entering talks.
Brent crude is trading at 11% higher at $33.33 a barrel as of 15:30 (GMT) on Friday, with the US West Texas Intermediate up 4% to 26.53 a barrel.
Oil prices plunge in 2020 amid Covid-19 outbreak
Brent crude came close to breaking through $70 a barrel on 6 January where it traded as high as $68.91 a barrel.
However, the commodity’s price has completely collapsed since hitting that peak, falling to a low of $24.74 at the start of April, representing a 64% decline over the first three months of 2020.
The rapid decline in the price of oil has been driven by the economic fallout of the Covid-19 virus which has severely impacted demand, along with the ensuing price war between Russia and Saudi Arabia, with the pair vying for market share and refusing to reduce supply.
But with the prospect of renewed talks between Russia and Saudi Arabia, oil prices has finally found support in April, climbing 34% over the last three days.
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