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Trump says Opec+ plans to double reported oil supply cut

Brent oil field

Price rose after historic agreement

Donald Trump said the OPEC+ group of oil producers want to cut output by 20 million barrels per day, double the 10 million barrels reported.

The US president’s comments will meet some concerns that the agreed cut was not enough.

“Having been involved in the negotiations, to put it mildly, the number that OPEC+ is looking to cut is 20 Million Barrels a day, not the 10 Million that is generally being reported,” Mr Trump said on Twitter.

Oil prices rose overnight after the world’s major producers agreed to a cut in output. The 9.7 million barrels a day reported cut is the largest ever reduction in production.

It brought an end to a damaging price war between Saudi Arabia and Russia which has been exacerbated by a slump in demand caused by the coronavirus.

Global benchmark Brent crude was up 3.9% to $32.71 a barrel and US grade West Texas Intermediate up 6.1% to $24.15 a barrel.

Brent had fallen to a low of $22.58 a barrel – its lowest price for 18 years – as the stalling of factory activity, grounding of aircraft and absence of traffic on the roads cut demand by half.

The deal was agreed following a video conference between 23 nations.

One analyst warned that the decline in oil demand is well ahead of the output cuts that have been agreed and that this will frustrate hopes of the price maintaining an upward momentum.

Further cuts may therefore be needed to bring supply and demand into equilibrium and make a lasting impression on the price.

Mr Trump personally thanked the leaders of both Saudi Arabia and Russia, King Salman and Vladimir Putin, in a tweet hailing the “big oil deal”.

He added: “This will save hundreds of thousands of energy jobs in the United States… Great deal for all!”

Mr Trump had played a significant role by cutting a deal with Mexico for a smaller cut in its output by 100,000 barrels for two months.

The Mexican president, Andres Manuel Lopez Obrador, said the US president had agreed to compensate for Mexico’s smaller cut.

However, financial markets remain on edge as severe restrictions on people’s movement and the lockdown of commerce drag the global economy into a deep recession.

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