Oil futures headed lower Sunday evening in electronic trade after a key meeting between oil giants Saudi Arabia and Russia was tentatively shifted to Thursday instead of Monday, amid rising tensions between the world’s biggest oil producers over the weekend.
The Organization of the Petroleum Exporting Countries and its allies, including Russia, will convene later in the coming week in an attempt to forge a truce and stabilize badly beaten-down energy prices after animus between Riyadh and Moscow reared up, causing a delay in a virtual gathering to Thursday from an originally scheduled Monday.
Over the weekend, Saudi Arabia and Russia became locked in a dispute, both blaming each other for the collapse in global energy prices.
On Sunday evening, West Texas Intermediate crude for May delivery CL.1, -5.71% was down $2, or 7.1%, at $26.34 a barrel in electronic trade, after front-month prices on Friday ended the week 31.8% higher — posting the largest one-week percentage rise on record, according to Dow Jones Market Data.
June Brent crude BRNM20, -4.28%, meanwhile, was $2.06, or 6%, lower at $32.03 a barrel after putting in a weekly gain of 22% on Friday.
Prices of crude, however, have been mostly in free fall, plunging in March after an alliance of OPEC and other major producers, known as OPEC+, failed to agree to production cuts, and Russia and Saudi Arabia launched a price war even as the coronavirus pandemic saw demand sharply drop as airlines worldwide halted flights.
Despite the delay, some experts are expecting a deal to be reached between the countries, and likely shale-oil producers in the U.S., to curb global output and bring an end to an internecine battle for market dominance.
“The argument that no country is really immune to the price fallout if the current projected market balance path continues is supported by recent market signals,” wrote Barclays oil analyst Amarpreet Singh, in a Friday research report.
Talk of a gathering of oil superpowers comes after President Donald Trump last week said that he has suggested that a grand alliance of oil producers with Russia, Saudi Arabia and possibly even the U.S. could be achieved.
Singh said that Barclays does “not think that an OPEC+ agreement will be contingent on a broader collaboration, but it would not be unprecedented for non-OPEC+ producers also to pitch in,” to help stabilize prices.