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Oil holds near $32 ahead of OPEC-led talks on output cuts

CommoditiesApr 08, 2020 05:35AM ET
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© Reuters. FILE PHOTO: A maze of crude oil pipes and valves at the Strategic Petroleum Reserve in Freeport, Texas

By Alex Lawler

LONDON (Reuters) - Oil steadied near $32 a barrel on Wednesday, supported by hopes that a meeting between OPEC members and allied producers on Thursday will trigger output cuts to shore up prices that have collapsed due to the coronavirus pandemic.

Thursday's videoconference meeting between the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia is expected to be more successful than their gathering in March, which ended in a failure to extend supply cuts and a price war between Saudi Arabia and Russia.

"The coming extraordinary producing-countries meeting is the only hope on the horizon for the market," said Bjornar Tonhaugen of Rystad Energy.

"Nobody wants to go short ahead of what could be a 'positive surprise' by OPEC++."

Brent crude (LCOc1) was down 9 cents, or 0.3%, at $31.78 by 0837 GMT after falling 3.6% on Tuesday. U.S. West Texas Intermediate (WTI) crude (CLc1) rose 94 cents to $24.87.

Crude has collapsed in 2020 because of a slide in demand due to the coronavirus outbreak and excess supply. Brent dropped to $21.65, its lowest since 2002, on March 30.

While OPEC sources have said a deal to cut production is conditional on the participation of the United States, doubts remain as to whether Washington will contribute.

The U.S. Department of Energy said on Tuesday U.S. output was already declining, without government action.

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

Before the OPEC and other producers' meeting, the latest round of U.S. oil inventory data will be in focus on Wednesday.

In a sign of excess supply, the American Petroleum Institute, an industry group, said U.S. crude inventories jumped by 11.9 million barrels. The government's supply report is due at 1430 GMT.

Oil holds near $32 ahead of OPEC-led talks on output cuts
 

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Comments (26)
TeaMaker Tex
TeaMaker Tex Apr 08, 2020 8:49AM ET
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Washington has nothing to do with shutting in oil wells in the States. Wells will be shut in based on their profitability at the current prices. The media does not understand how this works. There have been so many mistatements. The oil industry has been shutting in wells for decades. From what I am reading there is going to be a big demand shock in a number of months because of all the US shut in wells.
unknown territory
unknown territory Apr 08, 2020 6:39AM ET
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its going a lot higher then 32 once the saudi russia deal is done.
Marko Turčin
Marko Turčin Apr 08, 2020 6:27AM ET
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The title is the best... Oil is 8 $ from 32 $ I don't get this analysists...
Usman Mansoor
Usman Mansoor Apr 08, 2020 5:45AM ET
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What is time of meeting
Sang Jang
Jans_brown Apr 08, 2020 5:45AM ET
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i want to know also
John Carlo Bacong
John Carlo Bacong Apr 08, 2020 5:45AM ET
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Tommorow 14 GMT
Usman Mansoor
Usman Mansoor Apr 08, 2020 5:45AM ET
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Thx
CHIẾN NGUYỄN
CHIẾN NGUYỄN Apr 08, 2020 5:45AM ET
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Vienice 1400 GMT
Ravi Kumar Juriasinghani
Ravi Kumar Juriasinghani Apr 08, 2020 5:37AM ET
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Is Russia cuts oil production?
Ladi Spaqi
Ladi Spaqi Apr 08, 2020 5:11AM ET
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if they do not make a deal many companies will go BK. So deal is very much possible..
Idar Polden
Idar Polden Apr 08, 2020 3:39AM ET
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US Oil producers are too big to fail. Trump will make every normal US taxpaing citizens pay in the long term. Trump is the biggest communist on Tellus. Why not let the market deside?
Randall Paul
Randall Paul Apr 08, 2020 3:39AM ET
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I think we have to think about the other what? 9000 independent producers in the us and over 140000 jobs not to mention related industries. I think a deal will be struck.
Deshmukh Ganesh
Deshmukh Ganesh Apr 08, 2020 3:21AM ET
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wha is the timigs of OPEC meeting tomorrow.
Jake Kim
Jake Kim Apr 08, 2020 2:08AM ET
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It will get very complicated as all these big players in US doesn't want Trump to involve in assisting all these frackers as a whole. I bet the price will go worse than $20 after tomorrow's meeting. Wish you the price will go up and stablise this turmoil.
Charles Kao
ckao Apr 08, 2020 1:56AM ET
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All parties may agree that the best near term oil price is between 40 to 50.  The question is how ?
jemin An
jemin An Apr 08, 2020 1:27AM ET
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Trump made this market with full of foggy, uncertainties. Why US do not say nothing about self cut? Does he has willing to solve price war? What is means Lets see what happen? He manage the global market into foggy water, the worst captain ever I saw.
Enrique Lobato
Enrique Lobato Apr 08, 2020 1:27AM ET
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Don't worry, Trump doesn't need to do anything. With petrol consumption reduced by covid19 a lot of US companies will go bankrupt and the total US production will naturally be reduced.
Idar Polden
Idar Polden Apr 08, 2020 1:27AM ET
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Trump has treating with tarrifs on oil imports! the market will deside if Trump do not participate in cuts. Do not expected any agreement without cuts from us.
jemin An
jemin An Apr 08, 2020 1:27AM ET
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Oil in US, Only 5% is imported, it means tariff can do little about price calm, except dont think about counter tariff. And many refinery in US never want tariff, that shale is not heavy oil, that they only product fuel for truck by oil from outside of US. I dont know what is the plan of US.
Tran Minh Dung
Tran Minh Dung Apr 08, 2020 1:00AM ET
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I think they will take step by step cut. To reach that 10-15mmbopd cut it will take some time
Danh Thao
Danh Thao Apr 08, 2020 12:33AM ET
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about the will everyone wants to cut, but who cuts how much to all accept? I still think there's no deal.
Junk Man
Junk_Man Apr 08, 2020 12:09AM ET
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That old chestnut 🌰
Ami Gupta
Ami Gupta Apr 08, 2020 12:08AM ET
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Bought tons of APA lastweek and my girl friend also,We gave 500 calls on aapl500 calls on apa400 calls on spxl300 calls rrgb300 calls on din200 calls on exxon
Oil for Lunch
Oil for Lunch Apr 07, 2020 11:37PM ET
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None of this matters. It's all theater. When demand falls by 20mb/d, oil pumpers will be FORCED to reduce their output, else spill oil over the Texas prairie. But I'm not convinced oil demand will fall by 20mb/d. That might just be speculation by EIA wonks, without any real data to back that up. My own napkin forecast says oil demand shouldn't fall by more than 10mb/d, at its worst point, assuming GDP does not drop more than 30% over the next 3 months. But won't return to normal (100mb/d) for at least 2 years.
Jo Joe
Jo Joe Apr 07, 2020 11:37PM ET
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Europe gas demand is just half of before corona. US? Maybe same. I think EIA is not trying to prove but hiding real demand collapse. We already saw 1digit price in some region.
Feng Miao
Feng Miao Apr 07, 2020 11:15PM ET
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good bet on deal,
Vin Leo
Vinleo Apr 07, 2020 11:14PM ET
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When it comes to the markets, expect the unexpected. All nations involved in the deal are dealing with the virus - it’s in their best interest to make a deal
Elias Bernardo
Elias Bernardo Apr 07, 2020 11:14PM ET
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Hmmm I maybe!
Habib Mohamad
Habib Mohamad Apr 07, 2020 11:13PM ET
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production cut will happen. no doubt on it. but aft cut, price will stabilise around 35. will not go beyond 40 until corona cases shows daily reduction.
Donny Ahn
Donny Ahn Apr 07, 2020 11:13PM ET
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do you have oil etf?
Ollie North
Ollie North Apr 07, 2020 11:08PM ET
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This current situation is unprecedented in world history - and no one knows what will come out of the OPEC meeting - keep your finger on the trigger for a fast  buy/ sell !!
Crab King
CrabTheBrentKing Apr 07, 2020 10:55PM ET
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Bias , API is build , should be bearesh ,
Muhammad Amir
Muhammad Amir Apr 07, 2020 10:44PM ET
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what can I do? buy or sale shares. kindly tell me...
Oil for Lunch
Oil for Lunch Apr 07, 2020 10:44PM ET
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Sell all you have and give to the poor
Kaveh Sun
Kaveh Sun Apr 07, 2020 10:32PM ET
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It went up to fast. Must bounce in this range before next move.
Doyle Johnson
Doyle Johnson Apr 07, 2020 10:05PM ET
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Its illegal to fix prices in the United States, Our oil companies just take turns going bankrupt. Its like the Aggie that bought watermelons for $1.00 and sold them for a $1.00, couldn't make any money,went bankrupt, so he bought a bigger truck so he could sell more watermelons.
Jack Smith
BullyGoat Apr 07, 2020 10:05PM ET
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So the justice department will prosecute the government?  They can pass a bill making it legal.  Or presidential order.  open your mind.
Oil for Lunch
Oil for Lunch Apr 07, 2020 10:05PM ET
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BullyGoat is right. The govt can pass a simple law to achieve the same effect, limited output. Might have to be accompanied by a bailout, but we've been subsidizing big-oil for decades so what else is new. Heard on Fox News: Wealthy people deserve to be bailed out because they are the job creators, and they are smarter than us, so we should support them. They also work harder so deserve more bailout money, and QE liquidity. Oil companiesdeserve the biggest bailout because they provide the most essential service.
nidas vidzickas
nidas vidzickas Apr 07, 2020 9:43PM ET
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Deal gona happen :)
Oil for Lunch
Oil for Lunch Apr 07, 2020 9:43PM ET
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What, a total cut of 8mb/d against a demand drop of 25mb/d? And this will cause oil prices to rise? Tell me another.
nidas vidzickas
nidas vidzickas Apr 07, 2020 9:43PM ET
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The people who thinks that oil has to grow because of the cut will make it grow for a bit, I"m still waiting for oil to come down a bit today because of the oversupply
 
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