WASHINGTON — President Donald Trump said a tentative agreement between Saudi Arabia and Russia to cut global oil production is a “very acceptable agreement.”
“They’re getting close to a deal,” Trump said Thursday evening at a White House press briefing. Trump held a conference call with with Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman just before the remarks. “It was a very good call.”
Russia and Saudi Arabia agreed in principle on Thursday to slash oil production, a move that could help U.S. producers that were devastated by the two countries’ month-long price war. The decision was reached during a virtual meeting of the OPEC+ group of producers. But the deal is not final; all member countries have not formally agreed to the cuts and Mexico hasn’t signed up yet, according to delegates.
Trump, who for months championed low oil prices as a “tax cut” for American consumers, recently reversed course and pushed for a Russia-
Saudi deal to bolster prices. The shift followed complaints from U.S. producers and refiners that the price war threatened their industry.
Under the terms of the agreement, Moscow and Riyadh would both reduce their output to 8.5 million barrels per day, removing roughly 5 million barrels from the market. The move is meant to ease the oversupply of oil, which combined with depressed global demand because the coronavirus, tanked oil prices.
West Texas Intermediate settled down $2.33 to $22.76 a barrel in New York. Brent fell 4.14% to settle at $31.48 a barrel.
“I think it’s really hitting bottom, we’ve had a bottom,” Trump said of oil prices, “but now at $23 and $25, and probably heading up”
The agreed cuts did little to help the oil market. U.S. crude futures slumped more than 9% and Brent, the global benchmark, closed 4% in London on concern they won’t be sufficient in the wake of a devastating hit to demand from the pandemic.
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*Jordan Fabian and Mario Parker – Bloomberg