May 15, 2017

Russians and Saudis team up — favor extending oil deal

Alexei Druzhinin/Sputnik / AP

Saudi Arabia and Russia jointly said they favor extending the production-limiting deal between OPEC and some other big producers through the first quarter of 2018.

Why it matters: The comments by the world's largest producers signals what could happen when OPEC meets May 25 to weigh the future of the six-month production agreement that began in January.

"I think there is general consensus that this is the right approach and the right thing to do," said Saudi Energy minister Khalid Al-Falih at a Beijing appearance, according to several accounts.

The big bounce: Oil prices rose in trading on Monday after the announcement. Via CNBC, both West Texas Intermediate and Brent crude gained over 3 percent Monday morning.

What they're saying: "I think OPEC and Russia recognize that in order to get the market back on their side they will need 'shock and awe' tactics where they need to go above and beyond a simple extension of the deal," Virendra Chauhan, an analyst at Energy Aspects, told Reuters.

  • In a joint statement, the two countries' oil ministers said they want to ensure "market stability, predictability and sustainable development" and pledged to agreed to do "whatever it takes" to stabilize the market and reduce commercial inventories to their five-year average level.

To be sure:

Output growth by U.S. shale producers even amid modest prices is a check on OPEC's influence. In a research note late Sunday night, Goldman Sachs noted that the U.S. rig count climbed for another week to reach a level that's 125% higher than it was a year ago.

Go deeper

White House recommends Americans wear masks in public

New Yorker wearing a homemade face covering. Photo: Selcuk Acar/NurPhoto via Getty Images

The White House announced that the CDC is recommending Americans wear cloth masks or face coverings in public to help stop the spread of the coronavirus, President Trump said at a press briefing on Friday — emphasizing the guidance is "voluntary."

Why it matters: The use of face coverings could stop people who have the virus, whether they have symptoms or not, from spreading it further when they go out in public.

Trump calls to fill up more places with oil

President Trump is calling on the Energy Department to find more places to store oil, in the wake of rock-bottom prices and an ensuing economic collapse of the sector itself.

Driving the news: Trump’s comments came Friday during a televised portion of a meeting he hosted with industry CEOs to discuss ways to help the sector. It’s reeling from a historic drop-off in demand with the world shutting down to slow the spread of the coronavirus.

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 4:30 p.m. ET: 1,083,084 — Total deaths: 58,243 — Total recoveries: 225,422Map.
  2. U.S.: Total confirmed cases as of 4:30 p.m. ET: 266,671 — Total deaths: 6,921 — Total recoveries: 9,445Map.
  3. 2020 latest: Wisconsin governor calls for last-minute primary election delay.
  4. Oil latest: The amount of gasoline American drivers are consuming dropped to levels not seen in more than 25 years, government data shows.
  5. Business updates: America's small business bailout is off to a bad start.
  6. U.S.S. Theodore Roosevelt: Senators call for independent investigation into firing of Navy captain.
  7. What should I do? Answers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk.
  8. Other resources: CDC on how to avoid the virus, what to do if you get it.

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