Oil prices surge nearly 10% after Trump says Russia-Saudi feud can be resolved and China reportedly builds reserves.
Crude futures surged on Thursday after President Donald Trump expressed optimism that a damaging price war between Saudi Arabia and Russia can be resolved and after a report, China is building its stockpiles.
West Texas Intermediate crude for May delivery CL.1, 9.897% surged nearly $2, or 9.6%, to $22.80 a barrel, after slipping 0.8% to settle at $20.31 on Wednesday. June Brent crude BRNM20, 10.711% climbed $2.57, or 10%, to $27.30 a barrel, a day after the contract plunged 6.1% to $24.74 a barrel on ICE Futures Europe.
The first quarter has been punishing for financial markets, with oil especially punished by a Russia-Saudi price war that is flooding the market with supply and demand destruction from the global economic shutdown due to the coronavirus outbreak.
The U.S. benchmark lost 66.5% in the first quarter, the largest quarterly percentage loss based on records dating back to March 1983. Global benchmark Brent slid 65.6% for the quarter—the largest quarterly decline based on records dating to June 1988.
But Thursday indicated hope on at least one front of the dual issues facing the industry. “I have confidence in both that they’ll be able to work it out,” Trump said Wednesday at a White House press briefing, of the price spat between Russia and Saudi Arabia.
Bloomberg News separately reported China is taking advantage of low prices to build its reserves. The report said China may be buying an additional 100 million barrels over the course of the year.
The Energy Information Administration reported Wednesday that U.S. crude supplies rose by 13.8 million barrels for the week ended March 27, marking a 10th straight weekly increase. Analysts polled by S&P Global Platts expected the data to show a rise of 4.6 million barrels.
BRENT LONG (Buy)
ENTER AT: 27.98