WTI extended losses and is now trading ~$51/barrel after OPEC entered the second day of talks aiming to come up with a deal to cut production. New York futures declined ~1.7%, falling for the third straight session.
Saudi Energy Minister Khalid Al-Falih said on Thursday in Vienna that he was not confident that an agreement would be reached when the Organization of Petroleum Exporting Countries meets again with its allies on Friday.
OPEC is considering a proposal that would reduce supply by 650,000 barrels/day, with a further 350,000 barrel/day contribution from allies including Russia, according to delegates.
However, Russia has different sensitivities currently with the government seeing a budget surplus and a weak ruble only helping in the declining oil price scenario.
Oil has slumped ~30% from its peak in October over concerns of oversupply driven by waivers for Iranian oil imports and growing crude inventories as well as production in the US.
While Saudi Arabia’s energy minister said on Wednesday that output trimming of 1mn barrels/day were sufficient to balance the market, uncertainty prevails over whether the quantum would be adequate to bring up prices.
Russian President Vladimir Putin and Energy Minister Alexander Novak discussed cooperation within OPEC+ on Thursday during several meetings, as per Bloomberg. Although Russia had agreed to a cut in principle, the eventual quantity of their contribution to the cut remains uncertain.