Oil surrendered gains after rising in early trading as investors weighed whether an unprecedented deal by the world’s biggest producers to cut output would would be enough to steady a market pummeled by the coronavirus.
Futures in London were down 0.4% after the Opec+ alliance agreed to a plan to slash production by 9.7-million barrels a day starting in May, ending a price war between Saudi Arabia and Russia. The group reached a deal following days of intense negotiations after Mexico declined to endorse the original agreement reached Thursday.
The US, Brazil and Canada will contribute another 3.7-million barrels on paper as their production declines, and other Group of 20 nations will cut an additional 1.3-million. The G-20 numbers don’t represent real voluntary cuts, but rather reflect the impact that low prices have already had on output and would take months, or perhaps more than a year, to occur.