U.S. Crude Climbs After White House Comments On Saudi-Russia Dispute

Daniel Fowler
March 23, 2020

Two of the three commissioners at Texas's oil agency are skeptical of a plan now being weighed to curtail crude production in the state in an effort to balance global supply with demand and stabilize prices.

West Texas Intermediate for April delivery, which expires Friday, rose 56 cents to $25.78 a barrel on the New York Mercantile Exchange as of 7:54 a.m.in Singapore, trimming a fourth weekly loss.

Brent crude futures LCOc1 were down 32 cents, or 1.1%, at $28.15 a barrel by 1331 GMT.

Both main contracts plummeted at the open after a trillion-dollar support package for the American economy crashed to defeat, and virus deaths surged in Europe and the USA over the weekend.

US crude prices notched a weekly loss of 29 per cent, the steepest since the outset of the US /Iraq Gulf War in 1991.

Speculators increased their long positions in the period up to Tuesday, according to the Commodity Futures Trading Commission (CFTC), even as prices plunged. "They should get out when it turns red".

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Speculators rode Thursday's record one-day rally, hoping for a follow-through move, which never occurred.

I would say that it may be a matter of time before both sides will have to return back to the negotiating table but so far, they are hardening their resolve as we are still in the early stages of the fight and nobody appears to be worn out just yet.

Crude oil prices remain under pressure and highly volatile amidst challenges from the demand side via the impact of the COVID-19 on the global economy, and particularly on the Chinese economy, which is the second largest oil importer in the world. "A deal between Texas and OPEC would have been unthinkable a few weeks ago".

The price crash is also devastating to US oil producers, some of which have already begun putting employees on furlough.

USA operators have shed 33 rigs in 2020, after an already steep drop off in activity in 2019.

U.S. crude prices were also supported by the country's plans to buy crude for stockpiling after the U.S. Department of Energy said it would buy up to 30 million barrels of crude oil for the Strategic Petroleum Reserve by the end of June.

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