Oil prices surged higher on Tuesday following reports that ongoing talks between OPEC and its allies, known as OPEC+, remain possible.Â
Speaking to reporters Tuesday, Russian Energy Minister Alexander Novak said that Moscow had not ruled out measures with OPEC to stabilize oil markets, according to Interfax news agency.
Russia’s energy ministry has proposed to hold a meeting with Russian oil companies on Wednesday, Reuters reported, citing two unnamed sources.
They are expected to discuss whether to prolong Russia’s alliance with OPEC.
International benchmark Brent crudeÂ gained $3.41, or 9.9%, to trade at $37.73 per barrel, while U.S. West Texas Intermediate futures were up 9.5% to trade at $34.08 per barrel. Earlier in the session WTI surged more than 10%.Â
Prices rebounded following Monday’s more than 20% plunge, which saw WTI and Brent drop 24% for their worst decline since 1991.
The steep sell-off came as tensions betweenÂ Saudi Arabia and RussiaÂ escalated, which traders feared would lead to an excess supply of crude.
Saudi, the world’s biggest oil exporter, now plans to supply 12.3 million barrels per day (bpd) in April, well above current production levels of 9.7 million bpd, Saudi Aramco CEO Amin Nasser said on Tuesday. April’s crude supply will be “300,000 barrels per day over the company’s maximum sustained capacity of 12 million bpd,” Nasser said in a statement received by Reuters.
On Friday, OPEC ally Russia rejected the additional 1.5 million barrel per day production cut that the 14-member cartel proposed. After the unsuccessful talks concluded, OPEC’s de facto leader Saudi Arabia on Saturday slashed its official oil prices as it reportedly gets set to ramp up production.
The current production cuts expire at the end of March, which means that beginning April 1 nations can pump as much oil as they want.
This potential supply glut comes at a time when prices were already suppressed thanks to the coronavirus outbreak. A slowdown in travel has already hit demand, and a global economic slowdown could depress oil further.
On Monday, the U.S. Department of Energy said the Trump administration is monitoring the situation following oil’s steep slide.
“These attempts by state actors to manipulate and shock oil markets reinforce the importance of the role of the United States as a reliable energy supplier to partners and allies around the world. The United States, as the world’s largest producer of oil and gas, can and will withstand this volatility. The growth of the unconventional oil and gas industry in the United States has led to a more secure, resilient and flexible market,” the statement said.
âCNBC’s Eustance Huang and Reuters contributed to this report.