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Oil prices surge on trade war truce, prospects for Russian output cuts | Fox Business


Oil prices surged more than 3 percent Monday on prospects for a cut in global output and hope that a ceasefire in the U.S.-China trade war will boost demand for the commodity.

The U.S. benchmark crude oil, West Texas Intermediate, popped more than 5 percent early Monday before paring that gain.

But the more significant reason for the price hike was the weekend announcement by Russia that it would join Saudi Arabia and the Organization of Petroleum Exporting Countries (OPEC) in trimming output. The global oil market is suffering from an oversupply, exacerbated in part by massive U.S. shale oil production.

“The market is now pricing in a production cut” of between 1 million barrels a day and 1.5 million barrels a day from OPEC and its production allies, including Russia,” said Ole Hansen, head of commodity strategy at Saxo Bank. However, Putin over the weekend said there was “no final decision on volumes.”

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Oil prices surge on trade war truce, prospects for Russian output cuts | Fox Business.