Crude jumps 30% over Trump’s mediation bid

Crude oil prices soared over 30 per cent on Thursday after US President Donald Trump tweeted saying he had spoken to Saudi Arabia and expected Saudi and Russia to cut their supplies by 10 million barrels per day.

Brent futures rose $8.04, or 33 per cent, to $32.78 a barrel, while US West Texas Intermediate (WTI) crude rose $6.62, or 33 per cent, to $26.93.

Saudi Arabia later made a surprise call for a meeting of the Opec+ oil producers to "stabilise the oil market."

"The kingdom calls for an urgent meeting of Opec+ and a group of other countries with the aim to try and reach a fair deal to restore balance to the oil market," said a statement carried by the Saudi Press Agency.

Trump had tweeted on Wednesday that he had spoken with the crown prince of Saudi Arabia, Mohammed bin Salman, who in turn had spoken with Russian president Vladimir Putin. "I expect and hope that they will be cutting back approximately 10 million barrels, and maybe substantially more which, if it happens, will be great for the oil and gas industry!" he said.

However, later Russian news agency Sputnik reported that Kremlin spokesman Dmitry Peskov had refuted Trump's claim about a phone conversation between Putin and the

Saudi crown prince. "No. There was no such conversation," Peskov told Sputnik. This saw prices cooling down a bit, but still holding on 18 -20 per cent gains.

"We have to wait and watch whether Saudi and Russia will be able to stomach 10 million barrel per day and it will put a lot of fiscal pressure on them," said Hitesh Jain, vice president, Yes Securities.

Oil prices had plunged after a production cut agreement between Opec and Russia fell apart last month. Saudi Arabia and Russia have been waging a price war.

However, the hopes of revival in crude prices post the tweet of US President kept the market buoyant despite the demand side pressures continuing.

"The tweet had a sentimental impact on the market, though it does not solve the glut in the market, which is driving down prices," said Jain.