Oil surged Thursday, recording the most single day gain since 2008 as Middle East producers began to show signs of strain and helped by U.S. president saying he would get involved in the oil price standoff at the “appropriate time.”
Global benchmark Brent crude added $3.34 to close at $28.22 a barrel on London in New York the US crude grade WTI rose as much as 24%$24.99.
Oil dependent economies like Nigeria have seen their annual budgets torn to shred by the falling prices while threatening devaluation of local currencies.
Despite Thursday’s rally, prices are still down almost 60% this year, with the slide accelerating following a failed OPEC+ meeting in early March, after which major producers pledged to pump more in a battle for market share just as the coronavirus crisis crushes demand.
President Trump said he was searching for “medium ground” in the oil price war. “It’s very devastating to Russia, because the whole economy is based on that, and they have the lowest prices in decades,” Trump said.
“I would say it’s very bad for Saudi Arabia. But they’re in a fight, they’re in a fight on price, they’re in a fight on output. At the appropriate time I’ll get involved.”
“Trump getting involved was bound to happen with the existential threat to the US oil industry,” said Walter Zimmermann, chief technical strategist at ICAP Technical Analysis. “This rebound may not have a future though unless Saudi and Russia stop digging their heels in.”