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Oil Prices Rally as Saudi-Russian Deal “Very, Very Close”

CommoditiesApr 06, 2020 11:01PM ET
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© Reuters.

By Gina Lee

Investing.com – Oil prices rallied in Asia on Tuesday from a dramatic 8%-fall in their last session.

International Brent Oil Futures rose 2.43% to $34.11 by 9:52 PM ET (2:52 AM GMT) and U.S. Crude Oil WTI Futures jumped 4.1% to $27.15.

Russian Direct Investment Fund’s chief executive told CNBC overnight that his country and Saudi Arabia are “very, very close” to an agreement to cut production.

“I think the whole market understands that this deal is important, and it will bring lots of stability, so much important stability to the market, and we are very close,” Kirill Dmitriev, who heads the Russian sovereign wealth fund, added in his interview.

Andrey Kostin, chief executive of VTB Bank, agreed with Dmitriev as he said in a CNBC interview, “Russia is definitely very much interested in stabilizing oil prices and ... there’s the political will. No one is interested in low oil prices. Neither the United States nor Russia, nor the Saudis. From this point of view, I think there should be a reasonable agreement achieved at the end of the day.”

But even as OPEC+ members are said to be preparing for a virtual meeting on Thursday, investors are focusing on whether the two producers can reach an agreement on production cuts amid plummeting demand.

"This Saudi-Russia rift, that’s really key to the deal,” Herman Wang, S&P Global (NYSE:SPGI) Platts Middle East and OPEC managing editor, told CNBC.

“Set aside whether the U.S. will participate or not,” he said. “Without Saudi and Russia on the same page, there’s no deal to be had at all."

Oil Prices Rally as Saudi-Russian Deal “Very, Very Close”
 

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Comments (13)
Jake Kim
Jake Kim Apr 07, 2020 2:16AM ET
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Gina Lee .. really???? You will feel ashamed of your article at the end of this week.  Post
jc li
jc li Apr 07, 2020 12:55AM ET
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So the source is from a Russian investment fund company? Sounds so unbiased and trustworthy.
unknown territory
unknown territory Apr 07, 2020 12:42AM ET
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with all the trillions in stiumulus coming all commodities will reach new highs by years end. You guys are nuts trying to short oil when its price now is already baked into the market of upcoming events.  Commodiites are going through the roof rest of the year. The bottom is over unless  another pandemic starts up. You shorties are toast.
Shorti Sam
ShortiSam Apr 07, 2020 12:37AM ET
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The US has already cut 35% production year over year (see Baker Hughes Rig Count). Also, the slow in demand as it is now will be short lived as economies will be turning back to normalcy in a matter of weeks and so OIL WTI at 35/Barrel is to be expected. At the end of the day like like the article states... No one can live with a 20's oil -- Not even the Saudis who  will risk US retaliation and loss of national reserve as it is dependent on OIL margin revenue (not the cost of drawing OIL from the ground) to feed 80% of its population.
Andrew Hook
Andrew Hook Apr 07, 2020 12:37AM ET
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Retaliation of what kind ! Just to remind you SA is buying billion of weapon to US every year. The trouble maker is Russia and they already are under economical sanctions so nothing to lose regardind US shale oil producers. You miss the point thinking economy will get back to normal soon.
Val Lange
Val Lange Apr 07, 2020 12:23AM ET
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It doesn’t matter for the next 6 month what is the agreement, unless they cut 20 mln.
unknown territory
unknown territory Apr 07, 2020 12:23AM ET
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when oil drops from 60s to under 20 thats already baked into whats going on with the economy today. Its not gonna keep going lower. AFter saudi russia deal its going back over 40 short term. Once coronavirus thing is over in the summer its going back t o the 60s. Gl shorting it you guys never learn. You guys think a commodity can just go down forever like gold. Keep dreaming.
unknown territory
unknown territory Apr 07, 2020 12:23AM ET
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you would need new negative news about oil from whats happened so far for the market to keep going lower. And right now it looks like things are turning around not just with saudi russia deal but also the coronavirus look like its peaked and going opposite direction now.
Ollie North
Ollie North Apr 07, 2020 12:22AM ET
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I read a Bloomberg article yesterday, which said QUOTED Russian Gov't official as saying that Russia was preparing financially for $ 20 per barrel oil prices for the rest of 2020, even if  a deal is reached.........THAT is realistic and believable.
Tigran Harutyunyan
Tigran Harutyunyan Apr 07, 2020 12:22AM ET
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you are right, most likely it will be so.
Hank Williams
Hank Williams Apr 07, 2020 12:13AM ET
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Lip service to once again try to prop up prices in a market without demand. Everyone wants to feel like they have control. But with US producers pumping as fast as possible & demand down by as much a 40% no one has control. Carry on.
Pradeep Rao
Pradeep Rao Apr 07, 2020 12:12AM ET
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Just speculation.. cutting production will not help in long run..
unknown territory
unknown territory Apr 07, 2020 12:12AM ET
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of course it will
jemin An
jemin An Apr 07, 2020 12:09AM ET
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I predict they NEVER make out put 10M cutting, Never. only 4M can be in maximum. Oil price will drop historically after meeting in Thursday.
Tigran Harutyunyan
Tigran Harutyunyan Apr 07, 2020 12:09AM ET
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you are right, most likely it will be that
Jonathan Snell
Jonathan Snell Apr 06, 2020 11:52PM ET
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the us isn't cutting sooo. to many private companies. oil is not owned by the government in America like Russia and Saudi. Too many shale companies. shorts to quick cash but no deal on Thursday.
Tigran Harutyunyan
Tigran Harutyunyan Apr 06, 2020 11:52PM ET
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it's true, you are right !!!
David Cook
David Cook Apr 06, 2020 11:52PM ET
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what do you think about the 4 year loan call that is about to hit all those private drillers? some are leveraged up to their eyebrows with a debt to equity ratio of .5 in some cases: DNR. We could very well see a lot of the private drillers contract all on their own through this event?
Josef Derzavich
Josef Derzavich Apr 06, 2020 11:39PM ET
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too much oil in to many hands, with no demand,,, what type of deal can we expect?
Kevin Vo
Kevin Vo Apr 06, 2020 11:10PM ET
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Very close is the key. Oil to the moon
Dee Hwa
Dee Hwa Apr 06, 2020 11:10PM ET
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smh....
Ollie North
Ollie North Apr 06, 2020 11:10PM ET
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Dream on my friend.
Kilo Byte
Kilo Byte Apr 06, 2020 11:04PM ET
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This stinks.  Cheap oil was about the only thing we had going for us and would have assisted greatly in the recovery.
Venkat Bollu
Venkat Bollu Apr 06, 2020 11:04PM ET
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Dont worry, this will not sustain for long as this cut is just a temporary relief and once the reserves are empty their will be another warfare for sure
 
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