WASHINGTON (DTN) -- Oil futures on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange were higher in early trade Friday, with all contracts positioned for the first weekly gain in over a month after reports emerged Saudi Arabia and Russia agreed on a date for a joint ministerial meeting next week. At the meeting they will consider reducing collective supplies by as much as 10 million barrels per day (bpd), while calling for producers outside the alliance to make additional cuts.
The Organization of Petroleum Exporting Countries and ten allied producers led by Russia, collectively known as OPEC+, set an emergency policy meeting for Monday, April 6, to discuss potential production cuts, with overnight reports indicating the group is considering collectively reducing supplies somewhere between 6 and 10 million bpd starting this month. The final figure, however, will depend on the outcome of a meeting between U.S. President Trump and oil companies scheduled for Friday.
The White House has called for an extraordinary meeting with heads of top U.S. oil companies to work out a potential policy response to collapsing oil prices that have battered domestic shale producers. It remains unclear whether the Trump administration would seek coordinated production curbs from domestic producers, an idea first floated by the Texas Railroad Commission, an energy state regulator, last month.
The American Petroleum Institute, a trade group representing U.S. oil and gas drillers, issued a statement saying the industry opposes any government-mandated output cuts.
The Canadian province of Alberta, home to the world's third-largest oil reserves, said it is open to joining any potential global pact to reduce a glut of crude production.
"If we see an effort at a global reduction in production, we would be open to further measures on our part," Alberta's Premier Jason Kenney said on Thursday.
Meanwhile, the latest forecasts call for a 30% to 35% reduction in global oil consumption this month as nearly 3 billion people worldwide remain under some form of lockdown and over 1 million people are reported to be infected with coronavirus.
American Airlines, the largest air carrier in the United States, said it would cut between 70% and 75% of flights in April and about 80% of flights in May as the coronavirus pandemic drastically reduces travel demand. The airline also said it would cut almost 90% of international flights for both months, with reduced number of bookings seen well into July and August.
In financial markets, stocks on Wall Street closed solidly higher Thursday, spurred largely by rallying oil prices and despite nearly 10 million Americans reported to have filed for unemployment benefits in the last two weeks. Investors are now bracing for the U.S. jobs report for March due out at 8:30 a.m. EDT, with consensus calling for nationwide payroll to decline for the first time since 2010. Economists expect the United States to have cut 145,000 jobs in March, down from job growth of 273,000 in both January and February. The unemployment rate for March is expected to increase to 3.9% in March from 3.5% in February. The numbers for March, however, aren't expected to show the full extent that the coronavirus shutdown has had on the jobs market. The data were collected in just the first half of the month.
In early trading, May WTI futures surged $1.14 to near $26.47 barrel (bbl) and front-month ICE Brent June contract advanced $2.65 to a three-week spot high $32.58 bbl. NYMEX RBOB May contract climbed 3.27 cents to $0.6955 gallon and front-month ULSD May futures clawed back 4.97 cents to near $1.0452 gallon.
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