After the idea of intervening in the oil market by increasing the strategic reserves of the USA, a surprising recovery was observed in crude oil prices overnight.
After the steep gains in the previous session, oil prices had some recovery on Friday after Donald Trump hinted that he could intervene in the price war between Saudi Arabia and Russia “at the right time”.
The U.S. plans to purchase up to 30 million barrels of crude oil for emergency stocks by the end of June, while the regulators in the state of Texas, where the country’s largest oil producers operate, are reported to cut production.
A supply constraint to be provided by OPEC producers may raise Brent oil prices for the second quarter by up to $ 30 a barrel, while US measures to support the market may support prices in the near term.
The more active West Texas Intermediate (WTI) crude futures contract for May CLc2 was up 43 cents, or 1.7% at $26.34 a barrel by 0540 GMT. The contract rose as much as 5.5% to $27.34 per barrel earlier in the session.
US CLc1 crude oil futures for April also rose 43 cents to $ 25.65 a barrel. The front-month April contract, which increased 24% on Thursday, will end on Friday.
Brent crude oil futures LCOc1 climbed to $ 28.75, an increase of 28 cents or 1% per barrel. The international benchmark has risen 14.4% on Thursday. It is the largest one-day of gain since September, but became the fourth consecutive weekly drop by Friday following the others.
The Trump administration is considering using diplomatic pressure to force Saudi Arabia to shut its taps and using the threat of sanctions to Russia to force them to reduce their output. It is said that the US is considering intervening in the ongoing Saudi-Russian price war, and Texas producers may reduce oil production.
In the medium term, the impact of such policies will depend on their political viability, given the upcoming presidential election.