Saudi Arabia & Russia Throw Cold Oil on Trump's Tweets

04/03/2020 10:24 am EST


Joe Perry, CMT

Market Strategist,

Crude rallied on a Trump tweet indicting movement in the Saudi/Russia oil war but reports of a meeting among principles appears premature, reports Joe Perry.

Since March 9, WTI and Brent crude oil have been falling at a rapid pace, initially as Russia had scoffed at OPEC regarding an oil supply cut, and later as Saudi Arabia decided they would begin to pump as much oil as possible. Price had dropped as much as 55% in March, briefly trading below $20 towards the end of the month. 

However, WTI crude oil was up roughly 21% to high as $27.16 as U.S. President Trump said he spoke with Russian President Vladimir Putin yesterday and the Saudi Crown Prince (MBS) today and expects them to announce an oil production cut of 10-15 million barrels per day.

However, President Trump may have gotten ahead of himself as the Saudi official release was a little more subdued, calling for OPEC+ to hold an emergency meeting with the aim of “seeking a fair agreement” (no date has been set). Saudi Arabia said they would like the United States, Canada, Mexico, and other G-20 countries to join in with any cuts. In addition, the Kremlin has said President Putin has not agreed to a cut, or even spoke to the Saudi Crown Prince. However, the fact that Saudi Arabi wants an emergency meeting to discuss oil output production is constructive for the price of oil (however no date has been set)! 

With Trump’s tweet, WTI crude spiked higher from $22.30 to $27.16 (see chart below).

west texas
Source: Tradingview,

On a daily timeframe, the relative strength index (RSI) moved back into neutral territory. Price stalled right at horizontal resistance and began pulling back as the details of Trumps tweet began to circulate. The next level of resistance is horizontal resistance near $30.00 (see chart below).

west texas 10
Source: Tradingview,

Price pulled back to $25, which is horizontal support on the 240-minute chart (see below). Fibonacci retracement levels from the March 30 low to Thursday’s high provide support at $24.10, $23.15 and $22.20, before reaching a horizontal support at $21.72.

Source: Tradingview,

With Thursday’s move higher, what could be next? Perhaps we may see price chop within todays range over the next few days until the next bit of news comes out. If Russia were to participate in talks, one would expect oil prices to move higher. If talks don’t end up taking place or even worse, fail, oil prices could be back below $20.

Joe Perry holds the Chartered Market Technician (CMT) designation and has 20 years of experience in the FX and commodities arenas. Perry uses a combination of technical, macro, and fundamental analysis to provide market insights. He traded spot market FX and commodity futures for 17 years at SAC Capital Advisors and Point 72 Asset Management. Don’t forget that you can now follow’s research team on Twitter: and you can find more of’s research at

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