U.S. crude climbs after White House comments on Saudi-Russia dispute

By Koustav Samanta
SINGAPORE, March 20 (Reuters) - U.S crude oil prices edged
higher on Friday, extending gains after a 24% jump the previous
day, buoyed by hints from U.S. President Donald Trump he may
intervene in the price war between Saudi Arabia and Russia at an
"appropriate time."
U.S. crude and global benchmark Brent have both collapsed
about 40% in the last two weeks since talks between the
Organization of the Petroleum Exporting Countries and its
allies, including Russia, broke down which led Saudi Arabia, the
world's biggest oil exporter, to ramp up supply.
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 0151 GMT.
U.S. crude futures for April CLc1 rose 56 cents, or 2% to
$25.78 a barrel. The front-month April contract expires later on
Friday.
Brent crude futures LCOc1 slipped 3 cents, or 0.1%, to
$28.44 per barrel. Brent rose 14.4% on Thursday in its biggest
one-day gain since September last year.
The international benchmark, however, has plunged about 16%
this week having hit its weakest since 2003 on Wednesday.
The Trump administration is considering a diplomatic push to
get Saudi Arabia to close its taps and using the threat of
sanctions on Russia to force them to reduce output, the Wall
Street Journal reported, quoting unidentified sources.
"A fair bit of short covering ensued after President Trump
suggested he may tackle the oil crisis by brokering a deal
between Moscow and Riyadh," Stephen Innes, chief market
strategist at AxiCorp, said in a note.
U.S. crude prices were also supported by the country's plans
to buy crude for stockpiling after the U.S. Department of Energy
said it would buy up to 30 million barrels of crude oil for the
Strategic Petroleum Reserve by the end of June. "Buying oil for the strategic reserve is a very constructive
measure to help some U.S. producers avoid collapse amid the
international price war," said Per Magnus Nysveen, head of
analysis at Oslo-based energy research firm Rystad Energy.
Overall market sentiment still remains clouded by concerns
the coronavirus epidemic will continue to suppress economic
activity around the world, while markets are awash with cheap
supplies due to the Saudi Arabia-Russia price war.
"Global oil demand is falling at an unprecedented
pace...Saudi Arabia and Russia remain at the focal point of the
price plunge, but the negative demand shock to the market may
define the next several weeks," said Helima Croft, global head
of commodity strategy at RBC Capital Markets.