Oil surges on hopes for Saudi-Russia truce
Oil prices rose on Thursday after hopes of a truce between Saudi Arabia and Russia to cut oil output. Yahoo Finance's Jared Blikre breaks down the latest market action.
Video Transcript
JULIE HYMAN: Well, as we talked about a moment ago, we are seeing an almost unprecedented surge in oil prices today, to throw that word around again. Our Jared Blikre has been monitoring that move.
A lot of moving parts here, but we do know that the president said he had a call with Saudi Arabia about cutting production. There have been some conflicting reports about what happens now in terms of a meeting of OPEC Plus. Bring us up to speed, Jared. Jared, you there with us? There he is. Jared, it's possible that you are muted.
JARED BLIKRE: Yes. Immature rookie mistake. I get two of these a month. I'm sorry about that. Here's the tweet that sent markets higher-- not just oil, stocks as well. Just spoke to my friend MBS, the Crown Prince of Saudi Arabia, who spoke with President Putin of Russia. I expect and hope that they will be cutting back approximately 10 million barrels and maybe substantially more, which, if happens, would be great for the oil and gas industry.
Followed up by saying-- by tweeting after that, could be as high as 15 million barrels a day. Great news for everyone. Presumably, this would be per day.
And then Saudi Arabia came out with a statement a little bit after that. And we're going to take a look at the crude market here in the meantime. But they basically are calling for OPEC Plus to get together with a bunch of other nations, so it's not just going to be OPEC Plus and Russia and the others.
It would presumably include the United States as well to shoulder some of the burden of these cuts. And Texas has already explored some of this. The regulatory commissioner there has looked into it, got pushback from the API. That's the American Petroleum Institute.
But let's go back and take a look at what happened in the market here. We can see we got this huge spike up here, and that was this tweet that President Trump released. Then we got a pullback. But then the Saudis came out with a statement and largely holding onto the gains. Anything above about 24%, 25% would be a record.
And we can see oil companies just responding to this very, very bullishly, for the most part. We can see that one of the top gainers here is Meg Energy in the upper left. That is up 43%, and they're a Canadian play, so not even exposed to shale oil.
And then we also have some in the red here. And those are largely tankers we can see TNK, which is Teekay Tankers, they're going down because they've benefited from this reduction in crude prices. But overall, a huge day here.
But I do want to share something else in the context of where we've been, and we just look at a year to date chart here, if I can pull this up. We can see the carnage in the industry. And Whiting Petroleum there in the bottom right, this is a company that declared bankruptcy yesterday, trading at $0.32. Julie.
JULIE HYMAN: Jared, thank you very much. Important perspective there and definitely some welcome relief for some of these energy companies today.
