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FSUOGM PERFORMANCE FSUOGM
Oil prices slip on delay to OPEC+ talks
RUSSIA
Trump has waded into the dispute because of the damage
OIL prices were down when markets opened on April 6, following reports over the weekend that a meeting between OPEC+ and other producers due to take place that day had been delayed.
The emergency meeting, via video conference, is now likely to go ahead on either April 8 or 9, to allow more time for talks, OPEC sources told Reuters on April 4. Sources told CNBC that the meeting was expected to take place on April 9.
Brent futures fell to close to $30 per barrel in early trade, but had rebounded to $33.90 by 06:15 GMT, down 0.7% from the close of trade on April 3. West Texas Intermediate (WTI) sank 5.9% when markets opened, landing at $26.68 per barrel. But it later recovered to $27.90.
US President Donald Trump indicated on April 2 that Saudi Arabia and Russia were close to reaching a truce and averting an oil supply war, at a time when markets are already reeling from the impact of coronavirus (COVID-19) lockdowns.
In early March, Saudi Arabia proposed that the OPEC+ remove an additional 1.5mn bar- rels per day (bpd) from the market, prompting Russia to withdraw from the suppliers’ pact. The kingdom has responded by flooding the mar- ket, in an attempt to bring Moscow back to the negotiating table. Russia has begun ramping up its output in turn.
Trump’s administration has waded into the dispute, because of the damage that low oil prices are doing to the heavily indebted US shale industry. Signalling that animosity remains, Rus- sian Energy Minister Alexander Novak claimed it was Saudi Arabia that had refused to extend OPEC+ supply quotas beyond their expiry on April 1. The kingdom had also taken “other steps
that negatively affected the oil market,” he said. Saudi Oil Minister Prince Abdulaziz bin Sal- man hit back on April 4, blaming Russia for the
breakdown in OPEC+ talks.
“The Russian Minister of Energy was the first
to declare to the media that all the participating countries are absolved of their commitments starting from the first of April, leading to the decision that the countries have taken to raise their production to offset the lower prices and compensate for their loss of returns,” he said in a statement.
The Saudi minister also denied that Riyadh was seeking the collapse of the US shale industry, stating that this was instead Moscow’s intent.
“The Russian statements, in this regard, par- ticularly those made by their chief executives, are well-known and clear for all,” he explained. “It is no secret that the kingdom is one of the major investors in the US energy sector.”
Still, Prince Abdulaziz appeared to signal that a deal to end the standoff was possible.
“The kingdom’s arms remain open to those who want to find a solution for oil markets, and has called for an urgent meeting of OPEC+ and a group of other countries as part of its continu- ous effort to support the global economy during these exceptional times, and in response to the wish of ... President Trump to seek market bal- ance,” he said.
Neither Russia nor Saudi Arabia have said how much production they would be willing to shut down under a new supply pact. However, sources told Bloomberg on April 4 that Moscow would be willing to cut output by 1mn bpd, as long as the US joined the cuts.
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