The Organisation of Petroleum Exporting Countries and its allies known as OPEC+ has called for an emergency virtual meeting to hold on Monday, April 6, 2020.
This followed intervention of the United States President, Mr Donald Trump, in the spat between Saudi Arabia and Russia on Thursday.
Prices of crude oil began to rise yesterday after Mr Trump tweeted about this, giving hopes of better days ahead for the commodity, which has been terribly hit by low demand caused by Coronovirus outbreak in the world.
The United States extended a production cut to Saudi Arabia and others to support price of crude oil at the global market.
Next Monday’s meeting, which will be held virtually, would be used to discuss the newly proposed output cut among oil producers, including non-members of OPEC.
The details of those who will attend haven’t been confirmed yet. However, there are speculations that the United States, a driving force behind the emergency meeting, may likely be part of the talks.
Some oil producing counties have made their intentions known to cut production so as to keep the price high at the market.
On the part of Saudi Arabia, it has said it’s interested only if others, including the U.S. share in the production cut to be discussed at the meeting. This hints that it wants more than just the OPEC+ coalition, which would include America, Canada, Brazil and some other non-OPEC producers.
Yesterday, the market was met with an unexpected news when the Mr Trump made a Twitter post that he was expecting Russia and Saudi Arabia to cut output up to 15 million barrels, which analysts doubt would help the oversupply problem the market is facing.
Although late on Thursday, a source from Russia was reported to have denied that any agreement has been reached, but the news didn’t dent the surge recorded as prices climbed up to 25 percent.
Many, however, think a deal might be in the offing because the price war has really affected the economy of many producers, who in addition to facing demand problems, were finding it difficult to sell their crude grades.
Nigeria, among others, is expected to attend the meeting on Monday and any agreement reached could help bring output back to where they were before the oil price war was declared by Saudi Arabia, although there have been doubts that only one of the major problems will be solved as demand will still be low because of the pandemic.
As at press time, the oil market has responded well to this news as the Brent Crude was up by 4.34 percent or $1.30 to $31.32 per barrel and the US crude, West Texas Intermediate (WTI), up by 1.07 percent or 27 cents to $25.70 per barrel.
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