Oil prices rallied Tuesday morning in Asia as the U.S. indicated the possibility of an alliance with Saudi Arabia to stabilise prices.
International Brent Oil Futures rose 2.55% to $28.19 by 9:50 PM ET (01:50 AM GMT) and U.S. Crude Oil WTI Futures jumped 5.27% to $24.59.
U.S. Energy Secretary Dan Brouillette hinted on Monday that a U.S.-Saudi oil alliance was one option to stabilize prices as the COVID-19 pandemic continues to shrink demand and the price war between Saudi Arabia and Russia shows no sign of abating.
But he also emphasised: “At some point we will engage in a diplomatic effort down the road. But no decisions have been made on anything of that nature.”
“Almost hitting the lower trading bounds in the 20s has given some support for WTI and Brent,” Ryan Mckay, TD Securities commodities strategist, told Bloomberg.
“Generally, the stimulus is helping sentiment, even if it’s not helping demand. Investors may be hanging on to a sliver of hope that an OPEC-Texas relationship may transpire.”
