WASHINGTON (DTN) -- Nearest delivery oil futures on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange shifted lower in sync with equities in early trade Thursday after the U.S. Department of Labor reported a 3.283 million surge in new unemployment claims filed during the week-ended March 21, reflecting a deep economic contraction across the country inflicted by the coronavirus pandemic.
Early losses, however, were limited ahead of the G-20 meeting scheduled for this afternoon when the United States delegation is expected to press Saudi Arabia not to increase crude production so as not to further destabilize the global economy.
In early trading, NYMEX May West Texas Intermediate futures dropped $0.75 to near $23.73 barrel (bbl) and ICE May Brent fell to $27.04 bbl after both contracts posted marginal gains in back-to-back sessions. NYMEX April ULSD futures declined 2.72 cents to trade near $1.0706 gallon and front-month NYMEX RBOB contract posted modest gains to trade near $0.5500 gallon, reversing off better this week's 21-year spot low $0.3760 gallon.
As the pandemic spread deepens, the Trump administration reportedly plans to press Saudi Arabia to back away from its damaging price war with Russia during today's discussion at the G-20 virtual forum. Saudi Arabia, the chair of the G-20 meeting, is reportedly open to dialogue on oil policy involving several countries, producers and consumers that are being badly hurt by the latest slump in oil prices.
"Collaboration within the G-20 forum could widen the scope of discussions beyond just Saudi-Russian dialogue, bringing in larger group of countries, including Brazil, China, France, Germany, Mexico and the United Kingdom," said oil historian Daniel Yergin.
The reports follow the phone call held by U.S. Secretary of State Mike Pompeo with Saudi Crown Prince Mohammed bin Salman Al Saud this week, where Pompeo stressed Riyadh's leadership position in global energy markets.
"Saudi Arabia has a real opportunity to rise to the occasion and reassure global energy and financial markets when the world faces serious economic uncertainty. The secretary thanked the crown prince for Saudi Arabia's continued partnership in the face of the Iranian regime's destabilizing regional behavior," read a statement from U.S. Department of State website.
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