Apr 2, 2020 - Energy & Environment

Oil surges on Trump claim of major Saudi-Russia oil supply deal

Photo: Mandel Ngan//AFP via Getty Images

Oil prices surged Thursday after President Trump tweeted that Saudi Arabia and Russia were preparing to jointly cut oil production, but then gave back much of the gain as neither country offered confirmation of his claims.

But, but, but: Saudi Arabia said in a statement it's calling for an "urgent meeting" of the OPEC+ and a group of other countries, including Russia.

What's new: The Wall Street Journal, citing unnamed Saudi officials, reported Thursday afternoon that the country is "willing to consider massive oil-supply curbs as long as other nations join the effort."

Why it matters: The collapse of the joint OPEC-Russia supply-limiting pact and Saudi plans to boost output have been putting downward pressure on prices, which are already under severe strain because the novel coronavirus outbreak is causing a historic drop in demand.

Expand chart
Data: FactSet; Chart: Axios Visuals

Driving the news: Trump tweeted mid-morning that he's expecting Saudi Arabia and Russia — the world's largest producers after the U.S. — to cut production by a total of 10 million–15 million barrels per day.

  • Trump said he'd spoken with Saudi Crown Prince Mohammed bin Salman, and that MBS had spoken with Russian President Vladimir Putin.
  • Trump noted the moves would be "great for the oil and gas industry."

But, but, but: That would be an extraordinary amount of production to cut, vastly in excess of prior supply curbs by the alliance of OPEC, Russia and some other producers known as OPEC+.

And neither the Saudis nor Russians offered confirmation.

  • The Saudi state press agency said the kingdom was "calling for urgent meeting of OPEC + and a group of other countries, with the aim of seeking a fair agreement that will restore the desired balance to the oil markets."
  • And per the Russian news agency Sputnik, "Russia said it had not started energy talks with Saudi Arabia and no talks between the countries' leaders were scheduled for Friday." Their report also says a Kremlin spokesperson "refuted" Trump's claims about a talk between Putin and MBS.

This is a developing story and will be updated.

Go deeper

Mark Zuckerberg: Social networks should not be "the arbiter of truth"

Photo: Drew Angerer/Getty Images

Facebook CEO Mark Zuckerberg argued on CNBC's "Squawk Box" Thursday that social media platforms should not police political speech, and that "people should be able to see what politicians say.”

Why it matters: Zuckerberg was responding to Twitter's decision this week to fact-check a pair of President Trump's tweets that claimed that mail-in ballots are "substantially fraudulent." Twitter's label, which directs users to "get the facts" about mail-in voting, does not censor Trump's tweets.

House Democrats pull FISA reauthorization bill

Speaker Nancy Pelosi. Photo: Saul Loeb/AFP via Getty Images

House Democrats pulled legislation Thursday that would have renewed expired domestic surveillance laws and strengthened transparency and privacy protections amid broad opposition from President Trump, House GOP leadership and progressive Democrats.

Why it matters: The failure to reauthorize the Foreign Intelligence Surveillance Act (FISA) comes as Trump continues to attack the intelligence community, which he claims abused the law to surveil his 2016 campaign and Trump administration officials.

U.S. GDP drop revised lower to 5% in the first quarter

Data: Bureau of Economic Analysis; Chart: Axios Visuals

The U.S. economy shrunk by an annualized 5% in the first quarter — worse than the initially estimated 4.8% contraction — according to revised figures released by the government on Thursday.

Why it matters: It's the worst quarterly decline since 2008 and shows a huge hit as the economy was just beginning to shut down because of the coronavirus. Economists are bracing for the second quarter's figures to be the worst ever — with some projecting an annualized decline of around 40%.

2 hours ago - Economy & Business