Trump Says Russia, Saudi Arabia Will ‘Get Together’ on Oil Price

The United States has grown in recent years into the world's largest oil and gas producer, thanks to a technology-driven drilling boom.

West Texas Intermediate crude oil, the US benchmark, plunged 67 percent over the past three months to settle at $20.48.

"There's certainly going to be a fair share of consolidation in the USA shale industry with companies with weaker balance sheets being acquired by the behemoths", Shork said.

"COVID has taken the oil market hostage", said Michael Tran, managing director of energy strategy at RBC Capital Markets in NY.

"The unprecedented pace of demand destruction has forced the hand of refineries, on a global level, to issue run cuts, leaving barrels from the U.S.to the North Sea, to Asia searching, often unsuccessfully, for homes".

The Trump administration is also seeking to persuade the world's top oil exporter, Saudi Arabia, to decrease crude output, and will soon send a special energy envoy, Victoria Coates, to the kingdom. With crude prices so low, it is now costing oil firms to stay active, some analysts say.

The Saudis have since cut the selling price of their oil, raised production, and embarked on a fight with Russian Federation for a greater market share, pulling the United States into the fray.

The world is awash with oil due to a bruising battle for market share between Russian Federation and Saudi Arabia after they failed to agree on deeper production cuts to support oil prices earlier this month.

Saudi Arabia responded by threatening to ramp up production and slashing prices further still.

While New York futures rose for the first time in four sessions, adding 5.1% after stronger-than-anticipated China manufacturing data, oil is still down 65% since the end of December as demand vanishes and the market drowns in crude.

The change of ownership means any future USA sanctions on Russian-controlled oil operations in Venezuela would target the Russian government directly. Both sides have indicated that they can wait out a price crash.

Global commodities trader Trafigura said oil demand could fall by more than 30 million barrels per day (bpd) in April, almost one-third of daily fuel consumption. The outlook remains dire, with traders, banks and analysts forecasting a huge oversupply as governments effectively shut their economies. Six senators from oil-producing states last week urged Secretary of State Michael Pompeo to take a tougher stance against Saudi Arabia, while highlighting several "powerful tools at our disposal", including sanctions, tariffs and other trade restrictions. Both leaders "agreed on the importance of stability in global energy markets", the White House said in a statement.