With a single tweet Donald Trump caused a ruckus in the spot oil market:
This is totally fake news. The Saudis and Russians couldn’t come to an agreement with oil production, their end objective was to ensure that they take more market share from US shale regardless. Crashing the price of oil would accelerate the process, so I can’t possibly see why they would come to any sort of agreement.
In addition, whether the price of spot oil is $20 or $30, it isn’t going to make much difference for the majority of shale producers – they’re still going to lose a ton of money.
The big story here is going to be demand destruction, at least while the lockdown continues and probably for some time after.
I wouldn’t get too bullish on oil yet!