Oil recovered some ground on Tuesday as U.S. President Donald Trump and Russian President Vladimir Putin agreed to discuss stablising energy markets, but prices remain near 18-year lows as the coronavirus shutdown destroys demand.
U.S. crude was up by 20 cents, or 0.94%, at $20.36 a barrel, after settling down at $20.09, the lowest close since February 2002.
Brent crude was up by $3.45, or 15.22%, at $26.22 a barrel after closing at $22.76 in the previous session, the lowest close since November 2002.
Oil markets have faced a double whammy from the coronavirus outbreak and a price war between Saudi Arabia and Russia after OPEC and other producers failed to agree on deeper cuts to support oil prices in early March.
U.S. President Donald Trump and Russian President Vladimir Putin agreed during a phone call on Monday to have their top energy officials discuss stablising oil markets, the Kremlin said on Monday.
“President Trump called President Putin to discuss oil. Presumably, in an attempt to get Russia to pull up a chair to the negotiating table with Saudi Arabia or maybe even loosening sanctions on Russia,” said Stephen Innes, market strategist at AxiTrader.
“Any sign of Russia and Saudi making nice will be positive for oil … But it is an evolving story, and oil prices have recovered above WTI $20 after a chaotic session.”
Saudi Arabia, de facto leader of the Organization of Petroleum Exporting Countries (OPEC), planned to boost its oil exports to 10.6 million barrels per day (bpd) from May on lower domestic consumption, a Saudi energy ministry official said.
Global oil refiners, meanwhile, have cut their production due to the slump in demand for transportation fuel, with European refineries slashing output by at least 1.3 million barrels per day (bpd), sources told Reuters.