U.S. president contradicts reported figure of 10 million, crude oil futures posts initial gains after tweets
President Donald Trump said oil-producing countries agreed to cut output by about 20 million barrels per day, portraying the figure as double the publicly reported reduction in a pair of tweets.
Trump thanked Russia and Saudi Arabia for resolving a month-long price war that has slashed gasoline prices at the pump for U.S. consumers but hurt the American shale drilling industry.
Having been involved in the negotiations, to put it mildly, the number that OPEC+ is looking to cut is 20 Million Barrels a day, not the 10 Million that is generally being reported. If anything near this happens, and the World gets back to business from the Covid 19.....
— Donald J. Trump (@realDonaldTrump) April 13, 2020
Crude oil futures extended gains after Trump’s tweet, trading up 5.2% at 10:05 a.m. in New York.
The OPEC+ alliance has publicly agreed to cut 9.7 million barrels a day - just below an initial proposal of 10 million. Production declines due to the effects of low prices in the U.S., Brazil and Canada will also be counted toward the deal, deepening the global supply reduction by 3.7 million barrels a day. Other G-20 states were expected to contribute 1.3 million.
The U.S. president may have been referring to estimates of total worldwide oil production decline. Those figures, though, include some 2.7 million barrels a day of additional crude that some countries had planned to pump this month before the OPEC+ deal. The total would also include an estimated decline of 2.8 million barrels a day in Iran, Venezuela and Libya.
Copyright Bloomberg News
