Bank of America just raised its EUR/USD forecast
By Barani Krishnan
Investing.com - Oil prices jumped as much as $3 a barrel before turning negative on Thursday as traders greeted with both optimism and disbelief reports that Saudi Arabia and Russia had agreed to big output cuts within their OPEC+ alliance and that other producers will do more.
With the coronavirus pandemic reducing the big fanfare of the typical OPEC meeting in Vienna to a mere video hook-up, oil ministers from the Saudi-led cartel had to be content with a virtual meeting with their Russian and other allies.
That also complicated the job of reporters, who instead of hogging the stairwell of the OPEC building in the Austrian capital to gang-press delegates coming out of the meeting room, had to communicate electronically with them and other sources to know what was going on.
Without an official communique or news conference, the reporting that emerged was as mixed as one could imagine, sending traders in all directions.
West Texas Intermediate, the New York-traded benchmark for U.S. crude, was down $1.51, or 6%, to $23.58 per barrel by 2:10 PM ET (18:10 GMT), after soaring to $28.33 earlier.
Brent, the London-traded global benchmark for crude, was down 96 cents, or 2.9%, to $31.88, after a session high at $36.38.
“There are just so many conflicting versions coming out of today’s meeting that it’s not surprising at all that we’re back in the negative after jumping 12% on earlier,” said Tariq Zahir at the oil-focused Tyche Capital Advisors in New York.
Reuters reported that OPEC+ and others — referring to a G20 meeting on Friday that will include the U.S. — will discuss oil cuts as big as 20 million barrels per day. The report cited one OPEC source and one Russian source.
Bloomberg reported that OPEC+ was set to cut 10 million barrels a day of its oil output for two months. That compares with estimates for demand loss of as much as 35 million barrels a day. OPEC+ also plans to seek an additional cut of 5 million barrels a day from G20 countries, which will meet Friday.
Bloomberg also reported earlier that Saudi Arabia was pushing for any supply curbs to be measured against a higher baseline -- its April production of above 12 million barrels a day, delegates said earlier. At the same time, Russia showed no sign of weakening its insistence that a deal was only possible if the U.S. cuts output too, it added.