Oil pares losses as investors weigh chance of price-war truce

WASHINGTON - 6 April 2020: Oil pared earlier losses amid signs Saudi Arabia and Russia are making progress on an agreement to curb crude output as the coronavirus wreaks havoc on the global economy, Bloomberg reported Monday.

Futures erased most of an earlier loss of as much as 11 percent in New York to trade near $28 a barrel. Some progress was made in negotiations toward a pact between major producers on Sunday, according to diplomats, while US President Donald Trump said he didn’t think he’d need to resort to tariffs to get Saudi Arabia and Russia to reach a deal.

Meanwhile, CNBC said that Riyadh and Moscow are "very close" to an agreement in a report that cited the head of Russia’s sovereign wealth fund.

Crude surged by more than a third of its value over Thursday and Friday as an accord on output cuts started to take shape.

However, doubts crept in after the postponement of an OPEC+ meeting that was originally scheduled for Monday to Thursday as Saudi Arabia and Russia traded barbs over who was to blame for the collapse in oil prices.

A lack of participation from the US - the world’s largest producer - could still prove to be a stumbling block.

Despite originally calling for the deal, US President Donald Trump on Saturday described OPEC as a cartel and threatened tariffs on foreign oil to protect the American energy industry.

The aim of the talks is to cut production by about 10 million barrels a day, around 10 percent of global production.

But whether that can support prices that have fallen by more than half this year as the coronavirus crippled the global economy is questionable. The International Energy Agency said Friday the deepest cuts in the industry’s history wouldn’t be enough to calm the market.