Oil ministers from Opec and countries that were part of the Opec+ alliance that collapsed last month are expected to take part in an emergency meeting this week to discuss cutting supply in response to the coronavirus pandemic. Ministers will participate in an online conference after US president Donald Trump said a deal was imminent between Russia and Saudi Arabia that could lead to as much as 15m barrels a day taken off the market, potentially supporting oil prices after a heavy decline earlier this year.
The move has prompted questions about whether Saudi Arabia and Russia can mend their differences and what any potential deal might look like. Saudi Arabia has been supportive of a deal to cut supply as long as all global producers do their part. In recent days, the kingdom has also alluded to necessary participation from beyond the Opec+ group – which would include the US.
The Opec+ alliance fell apart last month after Russia was reluctant to agree to a Saudi proposal for deeper and prolonged cuts in the face of a drop in oil consumption. In turn, the kingdom launched a war for market share, cutting prices for its crude and accelerating production to record levels of above 12m barrels per day.
It is unclear how far producers might be prepared to cut, how the US might participate and what Russia wants to see before it agrees to any deal. As lockdowns and travel bans proliferate, traders have said oil demand could fall by up to 30m barrels a day this month – roughly a third of the world’s average daily consumption in 2019. Anjli Raval
Already, the pound has been on a wild ride. The UK currency dropped more than 13 per cent from peak to trough last month, reaching a low just above $1.14 before shooting back up to $1.23 by the start of April.
But the pound remains vulnerable to flare-ups in dollar demand and the impact of coronavirus on the economy. Thursday’s data releases for February include those relating to GDP and industrial production. Analysts said rising unemployment, coupled with a poor performance by the manufacturing sector in March, point towards a deep recession.