UPDATE 10-Brent crude surges 10% on hopes of oil output deal

* Oil benchmarks to end week higher after 5 weeks of
declines
* Trump says Saudi and Russia may cut 10-15 mln bpd
* IEA President says oil cuts will still not offset demand
drop

(New throughout, updates prices, market activity and comments)
By Jessica Resnick-Ault
NEW YORK, April 3 (Reuters) - Crude futures surged for a
second day on Friday, with benchmark Brent up 10% on hopes that
a global deal to cut crude supply worldwide will emerge early
next week.
On Thursday, oil staged its largest one-day rally in history
on prospects for a cut in supply equivalent to anywhere from 10%
to 15% of world demand. The sharp rebound from weeks of losses
came after U.S. President Donald Trump said Russia and Saudi
Arabia will negotiate to end a price war that slashed prices
last month by more than half. Trump said the U.S. has not agreed
to cut its output.
The rally continued Friday, with Brent crude LCOc1 futures
jumping 9.7%, or $2.87, at $32.81 a barrel by 12:59 p.m. EDT
(1659 GMT). Brent soared as much as 47% on Thursday for its
highest intraday percentage gain on record. It closed up 21%.
The contract is on track to end the week 31% higher.
U.S. West Texas Intermediate (WTI) crude CLc1 rose 6.8%,
or $1.74, to $27.06, a day after jumping 24.7%. The contract is
up about 25% so far this week, following five consecutive weeks
of declines.
OPEC has scheduled a Monday emergency meeting, led by Saudi
Arabia, where cuts equal to 10% of world supply - about 10
million barrels per day - could be agreed-upon. “Grand oil bargain diplomacy clearly shifted into high gear
overnight and cuts are likelier than they were until yesterday,”
said Robert McNally, president of Rapidan Energy Group in
Bethesda, Maryland. "The size of cuts seems to be increasing,
and the timing is accelerated.”
Moscow and Washington still have made no firm commitments on
output cuts. On Friday, Trump and Russian President Vladimir
Putin were to meet with top producers.
law forbids producers from
cooperating to cut output. Even a monumental cut in world output would not reduce a
glut by much due to slumping demand during the worsening
coronavirus pandemic, which has already sickened more than a
million people worldwide.
The head of the International Energy Agency, Fatih Birol,
said that even if OPEC+ cut supply by 10 million bpd, global oil
stocks would build by 15 million bpd in the second quarter.
Trump said on Thursday he had spoken with both Putin and
Saudi Crown Prince Mohammed bin Salman and they had agreed to
reduce supplies by 10 million to 15 million barrels per day
(bpd) out of total global supply of about 100 million bpd.
"It does appear that momentum is growing for some form of
output agreement," said analyst Harlan Matthews at Redburn
Energy.
"(But) there are huge obstacles to any output agreement on
this scale, and even if it were to be implemented the market
would remain chronically oversupplied in the near term."
The Canadian province of Alberta, home to the world's
third-largest oil reserves, is open to joining any potential
global pact to reduce a glut of crude. By cutting output by 10 million bpd, "the oil industry would
get at least three weeks more room to prepare for hitting the
wall when there are no more places to put the excess
production," said Rystad Energy's Per Magnus Nysveen.