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Oil dives more than 4% after Russia rejects steeper OPEC+ cut

06 March 2020 16:40 (UTC +04:00)

Oil prices slid more than 4% on Friday to their lowest since July 2017 after Reuters reported that Russia will not agree to steeper oil output cuts by OPEC and its allies to support prices, APA reports citing Reuters.

Brent and WTI crude futures tumbled by nearly $3 a barrel, or more than 5%, after the report.

By 1153 GMT Brent crude was down $2.06, or 4.1%, at $47.93 a barrel. U.S. West Texas Intermediate (WTI) was down $1.94, or 4.2%, at $43.96.

A Russian high-level source told Reuters on Friday that Moscow would not back an OPEC call for extra reductions in oil output and would agree only to an extension of existing cuts by OPEC and its allies, a group known as OPEC+.

The Organization of the Petroleum Exporting Countries (OPEC) held talks with its allies on Friday after the group told Russia and others that it favored an additional 1.5 million barrels per day (bpd) of cuts until the end of 2020.

“What counts really is what Saudi Arabia does. If Russia joined, it will not add substantially. We need to see if OPEC goes ahead all alone,” said Olivier Jakob, of the Petromatrix consultancy.

Non-OPEC states were expected to contribute 500,000 bpd to the overall extra cut, OPEC ministers said. The new deal would have meant OPEC+ production curbs amounting to a total of 3.6 million bpd, or about 3.6% of global supply.