By Sarah Toy 

Oil prices continued to slide Tuesday, erasing gains from earlier in the day as traders looked toward Thursday's meeting of the Organization of the Petroleum Exporting Countries and its allies.

U.S. crude futures fell 9.4% to $23.63 a barrel, while Brent, the global gauge of prices, fell 3.6% to $31.87 a barrel.

Crude prices plunged to their lowest levels since 2002 last week before surging Thursday and Friday after President Trump said Russia and Saudi Arabia were close to reaching a deal to cut oil production. Prices then fell Monday after a virtual summit for OPEC and other oil-producing countries, originally planned for Monday, was postponed to Thursday.

U.S. crude futures are down 61% so far this year, while Brent is down 52%.

Investors are hoping the meeting will signal an end to the current oil-price war between Russia and Saudi Arabia, which began when a deal between OPEC and its allies to cut output fell apart last month. After Russia rejected a Saudi-backed plan by OPEC to cut crude output in response to dwindling demand due to the coronavirus crisis, Saudi Arabia slashed its prices and made moves to boost production.

Traders and analysts are waiting to see whether OPEC and other oil-producing nations can come up with a coordinated response to mitigate the recent blow to prices. Measures to curb the spread of the virus have battered demand, while the price war has worsened a global glut of oil. The world is running out of storage, and analysts say such prices are unsustainable for producers.

Energy companies have been hard-hit, with Whiting Petroleum Corp. filing for bankruptcy protection and producers such as Chevron Corp. and Diamondback Energy Inc. pledging to lower spending. Continental Resources Inc. is suspending its quarterly dividend to conserve cash. The company also plans to cut back output around 30% in April and May.

Meanwhile, traders expect crude prices to remain volatile until there is more clarity on potential supply cuts.

"Every day to the next is a complete unknown," said Jonathan Wagner, senior energy broker at Ion Energy Group.

Write to Sarah Toy at


(END) Dow Jones Newswires

April 07, 2020 15:37 ET (19:37 GMT)

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