US, WASHINGTON (ORDO NEWS) — Oil prices are rising rapidly for the second day in a row after a landslide drop to record low levels. Oil began to rise in price on the evening of March 19 by 6-7% and today growth continues. It’s all about Trump.
The price of contracts for the supply of oil has risen sharply since 9am by 6-7%.
According to trading at 11:20 UTC, the cost of a barrel of the European standard Brent rose by 6.4% to $ 30.4 per barrel, and the American grade WTI – by 7% to $ 28.
The Russian export grade Urals went up to $ 28 after the collapse to $ 19 per barrel. But this is still not enough: the Russian budget is drawn up at a price above $ 40 per barrel, and now the country is spending reserves for the budget and maintaining the ruble exchange rate.
The United States may intervene in the oil price war unleashed by Saudi Arabia, according to WSJ. Texas officials said the state’s entire oil and gas sector could disappear at such oil prices.
US administration officials are exploring the possibility of diplomatic pressure to force Saudi Arabia to reduce oil production to the level of the previous OPEC + deal. The United States simultaneously wants to threaten Russia with new sanctions.
The US goal is to stabilize prices after US oil companies lose huge amounts of money and are forced to take new loans to pay off debts due to the collapse in oil prices.
U.S. oil workers have called on U.S. President Donald Trump to intervene, say people familiar with the issue. If prices do not stabilize at about $ 40 per barrel, then dozens of US oil companies go broke.
“There is a high likelihood of continued growth to $ 40 per barrel against the backdrop of active measures by Donald Trump. After the US president replenished US strategic reserves of cheap oil with 77 million barrels and expressed industry support, he will certainly try to negotiate a deal with Saudi Arabia in order to further reduce pressure for the entire oil shale industry, which is currently experiencing the worst of times, “said Iskandar Lutsko, chief investment strategist at ITI Capital in a commentary to RT.
In his opinion, the market wins back the news of previously announced measures to stimulate the economy and stabilize financial markets.
Earlier, the main package of measures was announced – the launch of cash injections into markets in the US and Europe, fiscal stimulation around the world. The most significant package proposed by US administrations – $ 1.1 trillion.
“All this was ignored by the markets due to the active spread of the coronavirus. This is and will be a key factor in the bearish trend. Therefore, the current growth is a delayed rebound, which may again end in a fall,” the expert predicts.
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