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Both Saudi Arabia and Russia are willing to cut oil production only if all countries follow through. This means that it will be up to the US to make a critical decision. We believe that Trump will likely be pressured by its US shale producers to cut production. Long WTI/USD?

OPEC members will be meeting tonight at 10.30 pm (GMT+8) to discuss a possible production cut.

This is after Russia and Saudi Arabia engaged in an all-out price war by increasing their production amidst a collapse in demand due to the Covid-19 pandemic.

On Wednesday, Russia was reportedly willing to cut its output by 1.6 million barrels a day, or about 15% of its total production.

Both Russia and Saudi Arabia have made it clear that they will only cut oil production if all major oil producers do so as well.

All eyes will be on the US whose shale producers have been extracting a near-record 13 million barrels a day on the final week of March.

We believe that Trump will be pressured by his administration to abide by the production cut – as this would boost his approval rating in the November election.

Next, the US jobless claims will be out tonight and the market is expecting the jobless claims to hit 5 million. The market previously ignored US jobless claims with US stock futures continued to move higher.

The US labor force has around 164 million people, with 5 million jobless claims makes up about 3% of the overall labor force. Keep in mind that this is a weekly data. If the pandemic lasts for another 3-6 months, the jobless claims may easily hit 50%.

With this in mind, we will most likely see another round of stimulus package from the Trump administration.

This will in turn force the Trump administration to play ball when OPEC requires the US to cut oil production alongside with the rest of the top producers.

WTI/USD can move higher towards USD36 if a production cut is agreed tonight.