Signs showing that Russia and Saudi Arabia will be ending their oil feud has given a 20% boost to the prices, which is the most significant leap on record.
Mr. Donald Trump, the US President, announced that he expects the two sides to cut the supply; meanwhile, Saudi Arabia has called for an emergency meeting of all oil producers.
Russia declined a deal during the last OPEC meeting for cutting down the production of oil as the demand was low due to coronavirus breakdown. Since then, the cost of crude oil has plummeted to all time low, which has not been seen in the last two decades. In order to gain market share, Russia and Saudi Arabia increased their production and slashed the prices.
The moves and the broader collapse in demand have also caused the worst quarter for US oil on its record. The prices fell to the two thirds in the first three months of the year, which rocked the American Energy Sector.
On Thursday, the US president tweeted that he expected & hoped that both the countries would agree to cut the supply by 10 million barrels, and he hoped that both would come to deal as it was bad business for both of the countries.
The Russian Energy Minister Alexander Novak also stated that Russia would work on stabilizing the oil market.
Based on all this news, the international benchmark, Brent Crude, rose 21% to finish at $29.94 a barrel, and the price of US oil known as West Texas Intermediate (WTI) jump to 25% to $25.32 per barrel, which were record growth.
It is a consensus among the researchers that if a deal is actually enacted, it would be positive for the oil prices. They believe the benefits due to themodest reduction in the crude oil supply will be swamped due to the declining demand that is being noticed today as a courtesy of Coronavirus.
The US President is also going to meet with bosses of the major energy companies, including Exxon Mobil and Chevron at White House on Friday, as they have described that the US energy sector has been “ravaged” due to the global market conditions.