Oil Briefly Falls Below $50 a Barrel Ahead of G20 Summit
Crude prices returned above $50 a barrel Thursday, shrugging off an earlier fall amid reports that Russia was willing to join OPEC in a new round of production cuts. Markets remain on edge ahead of the highly anticipated Group of 20 summit in Buenos Aires, Argentina where U.S. President Donald Trump will meet Chinese counterpart Xi Jinping in a new round of trade talks.
Oil Recovers Modestly
After briefly falling below $50 a barrel for the first time in over a year, U.S. West Texas Intermediate (WTI) futures rose 87 cents, or 1.7%, to 51.16 a barrel on the New York Mercantile Exchange. Brent futures gained 74 cents, or 1.3%, to $59.50 a barrel. The global benchmark reached an intraday bottom of $57.50 a barrel before staging a recovery.
Oil’s recovery was aided by a report that Russia has accepted OPEC’s call to lower output levels in the coming months to drain the market of excess supplies. Russian President Vladimir Putin signaled his readiness to cooperate with Saudi Arabia after praising its controversial leader Mohammed Bin Salman. In Putin’s view, oil around $60 a barrel is “balanced and fair.”
Crude futures are also recovering from oversold territory following a massive slump that began in early October when prices were trading at four-year highs. Traders can expect a strong recovery to take hold in the next two weeks as the G20 brings clarity on global trade and OPEC announces a new round of production cuts. The Saudi-led oil cartel is scheduled to meet Dec. 6 in Vienna, Austria.
G20 in Focus
President Donald Trump departs to Argentina on Thursday to kick off a series of talks focused on trade, geopolitics and bilateral relations. High on the agenda is a face-to-face meeting with Chinese President Xi Jinping over tariffs and free trade. While both leaders have expressed optimism about resolving their trade dispute, Trump recently stated he will not relieve China of import duties unless a new pact is reached. The meeting is now scheduled to take place Saturday.
The Kremlin has also confirmed that President Vladimir Putin will meet his U.S. counterpart this weekend. Trump had previously stated he might cancel the meeting after Russian ships seized three Ukrainian vessels near Crimea. According to Kremlin spokesman Dmitry Peskov, the meeting will largely focus on bilateral relations and security.
“First of all, questions related to bilateral relations, we need to think about how to start talking on matters of bilateral relations, on matters of strategic security and disarmament and on regional conflicts,” Peskov said in a briefing, according to CNN.
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