Oil Prices Rise, Fall As Russia, Saudi Arabia Agree On Output Cuts

Oil prices briefly traded higher on Thursday after OPEC+ members, including Russia and Saudi Arabia, reached a preliminary deal to cut oil output. 

The deal is to cut oil production by 10 million barrels per day for two months beginning May 1, according to Amenda Bakr, deputy bureau chief at Energy Intel. 

The oil producers would then cut production by 8 million barrels per day from July to December and 6 million barrels per day for the period of January 2021 to April 2022.

Earlier Thursday, Brent crude gained around 10%, reaching $36.04 a barrel. The commodity was last seen trading down 2.71% at $31.95. 

The volatility is expected to continue as the coronavirus outbreak and resulting slowdown in economic activity put downward pressure on oil demand. 

In March, the OPEC meeting ended in a Saudi-Russia price war.

On April 2, President Donald Trump applied pressure on Saudi Arabia and Russia to slash oil production. This spurred the Saudis to call for a meeting aimed at reaching a fair oil deal.

The OPEC meeting was still in progress at the time of publication. 

Price Action

The United States Oil Fund LP USO was down 7.26% at $4.98 at the close Thursday, while the Direxion Dly S&P Oil&Gs Ex&Prd Bl 3X ETF GUSH closed 0.7% higher at $24.51.  

Occidental Petroleum Corporation OXY shares were down 1.48% at $15.36 at the close and gaining back 0.85% in the after-hours session. Exxon Mobil Corporation XOM shares were down 1.66% at $43.13 at the close and Apache Corporation APA shares were p 7.97% at $8.20 at the close and gaining another 2.56% in the after-hours session. 

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