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Photo: Win McNamee/Getty Images
Oil prices climbed Thursday morning as traders are responding to President Trump's comments yesterday evening that Russia and Saudi Arabia could soon mend fences on oil supply policy, per the Financial Times.
Driving the news: Trump told reporters that he believes, based on his recent calls with Russian President Vladimir Putin and the Saudi crown prince, that "they will work it out over the next few days."
- Bloomberg also notes that the market is responding to China's plans to start buying oil for its strategic reserves.
Reality check: A note yesterday from Rapidan Energy Group says, "At present we do not expect Riyadh to change course."
- Their "base case" sees deeper and sustained crude price drops as coronavirus' effects continue hitting demand.
- They see prices under $20-per-barrel and the "bleak" economic outlook leading to OPEC+ resuming negotiations by early summer, leading to a deal that revives previous quotas and imposes some additional cuts.
What's next: Trump is slated to meet Friday with top executives of large oil companies to discuss potential ways to help the sector that's facing strong economic headwinds as prices and demand have collapsed.
- The meeting is slated to include CEOs of ExxonMobil and Chevron, as well as big independent producers Occidental and Devon Energy, among others.
- The prospect of efforts to help the sector is also putting some upward pressure on prices, per multiple reports.
But, but, but: The Wall Street Journal, which first reported the meeting, points out...
"[T]he options are limited for Washington to help beleaguered U.S. oil-and- gas producers, and there are strong differences between major oil companies and some independent shale drillers about whether aggressive government actions are even necessary, making the prospect of any agreement challenging."
Go deeper: Trump's big chill on offshore drilling