Oil Continues to Slide as Traders Look to OPEC+ Meeting
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
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
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 firstname.lastname@example.org
(END) Dow Jones Newswires
April 07, 2020 15:37 ET (19:37 GMT)
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