Oil’s Collapse Interrupted by Russian Commitment on Output Cuts

(Bloomberg) -- Expectations the OPEC+ alliance will deepen output cuts put a floor under last week’s 16% plunge in oil prices, with futures in New York rallying even as the coronavirus continued to spread rapidly.Russia is ready to cooperate to support the world oil market, even though it’s comfortable with current prices, President Vladimir Putin said Sunday. That acted as a brake on plunging crude prices after a Chinese manufacturing gauge released over the weekend came in at a record low, undershooting already low expectations and highlighting the virus’s mounting economic impact.Oil consumption may not grow at all this year for only the fourth time in four decades, according to a growing minority of traders, investors and analysts. While economic stimulus in China and elsewhere may revive demand in the second half, it’s unlikely to completely make up for the current hit to consumption. Against this backdrop, OPEC+ meets on Thursday and Friday in Vienna to decide on the extent of production cuts.See also: Oil Looks Into Abyss as Virus Threatens Demand Contraction“We think Saudi Arabia will likely be able to rally the rest of the producers for a cut of at least 1 million barrels a day,” Helima Croft, head of global commodity strategy at RBC Capital Markets, said in a note. Current prices do not work for most of the OPEC+ group and Russia isn’t as price-agnostic as it endeavors to seem, she said.West Texas Intermediate futures for April deliver rose 1.2% to $45.29 a barrel on the New York Mercantile Exchange as of 9:46 a.m. in Singapore. It swung between a loss of 3.2% and a gain of 2% earlier.Brent futures for May delivery climbed 1.7% to $50.50 a barrel on the ICE Futures Europe exchange after losing as much as 2.6% earlier. The global crude benchmark traded at a premium of $4.99 to WTI for the same month.\--With assistance from James Thornhill.To contact the reporter on this story: Sharon Cho in Singapore at ccho28@bloomberg.netTo contact the editors responsible for this story: Serene Cheong at scheong20@bloomberg.net, Andrew Janes, Dan MurtaughFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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