Trump: Saudis and Russia may cut production. Brent rises $8, gives back $4

April 2, 2020
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  • President Trump tweeted that he spoke with Russian President Putin and Saudi Crown Prince Mohammad Bin Salman
  • Trump both “hopes and expects” that they will cut approximately 10 MMbbls/d
  • Per Bloomberg headlines, Saudi Arabia is calling for an urgent OPEC+ meeting
  • Brent soared as much as 41%; WTI was up as much as 30%
  • Trading was halted due to limit-up movement
  • Prices have since come off with Brent hovering above $30/Bbl and WTI above $25/Bbl
  • In response, speaking to Bloomberg, Texas Railroad Commissioner Sitton stated that the world is 20-24 MMBbls/d oversupplied
  • AEGIS notes global demand may be instantaneously lower than the rumored 10 MMBbl/d cut. Our analysis shows a drop of OPEC production of this magnitude could take months
  • We also note this news may help market sentiment, but the effect on the global supply-demand balance may take time

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