The price of oil soared on Thursday afternoon following reports Russia and Saudi Arabia were to agree on a production cut that could amount to 10 million barrels a day.

The news was first unveiled by President Trump who put out a tweet following a telephone conversation with ‘his friend’ the Crown Prince of Saudi Arabia.

Russia and Saudi Arabia have been locked in a price war following the decision by Russia to increase production which has rocked global oil markets.

Oil prices ripped higher with both Brent and WTI up over 25% and Brent Crude rose over $30.

Following Trump’s tweet, reports emerged of Saudi Arabia requesting an emergency OPEC meeting.

In an interview with Bloomberg, Ryan Sitton, Texas Railroad Commissioner , said before the US lockdown the global oil market was 18 million barrels a day oversupplied which he thought was now at around 22 million barrels a day.

This would mean cutting 10 million barrels would still leave an oversupply in the oil market and could pressure oil prices as storage facilities continue to become full.

Nonetheless, equities surged on the back on the news with oil heavy weights BP and Royal Dutch Shell adding to gain in the immediate reaction. Shell was up over 10% on Thursday afternoon adding a significant number of points to the FTSE 100.

Shares had been trading towards their lows before the announcement following the largest rise in US unemployment figures in history. Initial jobless claims rose by 6.6 million, doubling last week’s 3 million.

This is the sharpest increase in unemployment figures in US history. During the financial crisis it took 19 weeks for 10 million to register unemployed in the US and the same amount have been recorded in just two.

The FTSE 100 had rallied to highs of 5,547 before the rally faded into the close.