14:56 GMT30 May 2020
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    Oil prices shot up by over 20 percent in two days of trading after President Donald Trump suggested that Saudi Arabia and Russia may reach an agreement on reducing crude output amid the COVID-19 pandemic.

    The Trump administration is considering shutting down US oil rigs in the Gulf of Mexico on the grounds of protecting workers from the threat of contracting the new coronavirus, the Wall Street Journal has reported, citing people said to be familiar with the discussions.

    The proposal reportedly comes following news that several oil platform workers had tested positive for the virus.

    If enacted, the decision would remove about 2 million barrels per day (bpd) in US crude from its total of 13 million bpd.

    US officials including White House representatives declined to comment on the veracity of WSJ’s reporting.

    The report comes as oil futures continue to make gains after falling to lows unseen in decades last week amid bad news on the economic front as COVID-19 continues to keep countries on lockdown, shuttering factories, offices and bringing tourism, air travel and in some cases even vehicle transport to a standstill.

    On Thursday, President Trump expressed hope that Russia and Saudi Arabia could agree to settle their dispute over oil prices in the near future, with his remarks sending prices soaring to make up for some of their lost value.

    On Friday, Russian President Vladimir Putin estimated that global oil producers need to cut about 10 million barrels of current output for prices to stabilize, saying Russia was interested in prices rebounding to the $42 per barrel mark. Putin said he has been in contact with both Washington and Riyadh on the market situation.

    OPEC+ is expected to have a meeting on April 6 to discuss the situation.

    Oil prices collapsed last month after Russia and Saudi Arabia failed to agree on supply cuts amid the downturn in demand due to the COVID-19 outbreak.

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