Oil, gas and mining

Crude prices lower even as Moscow, Riyadh work toward deal

Crude oil prices were a big story in the pre-market Monday. CNBC’s Becky Quick reports.

Oil prices fell on Monday, reversing earlier gains after the CEO of Russian sovereign wealth fund RDIF told CNBC that Moscow and Riyadh were “very close” to an oil deal, and as Russia reportedly said it was ready to reduce output, according to Reuters.

U.S. West Texas Intermediate futures fell 5.5% to trade at $26.77 per barrel, while international benchmark Brent crude futures dipped 3.7% to trade at $32.82.

“I think the whole market understands that this deal is important and it will bring lots of stability, so much important stability to the market, and we are very close,” Kirill Dmitriev of the Russian Direct Investment Fund told CNBC’s “Capital Connection” on Monday. Brent prices edged into positive territory shortly after Dmitriev’s optimistic comments, but have since pared those gains.

On Monday the U.S. Department of Energy said that Secretary Brouillette participated in a “productive discussion” with Saudi Arabia’s energy minister about the “ongoing challenges and instability in global oil markets.” According to the statement the two energy ministers agreed to “continue this dialogue through a G20 Energy Ministers meeting in the near future.”

Oil briefly rebounded from its session low during afternoon trading after Reuters reported that Russia was ready to substantially reduce its production, citing two sources familiar with the matter.

Earlier, U.S. crude futures fell more than 10% after a meeting between OPEC and its allies, initially scheduled for Monday, was delayed. The postponement stoked fears on Wall Street that a production cut might face hurdles.

Oil surged last week — WTI and Brent are both coming off their best week on record — as Saudi Arabia called a meeting between OPEC and its allies, known as OPEC+, signaling there could be progress on a production cut.

The organization’s March meeting ended with no deal after Russia rejected the 1.5 million barrels per day cut that Saudi Arabia had proposed in a bid to prop up falling oil prices as the coronavirus outbreak sapped demand. This kicked off a price war between the two powerhouse producers.

The Monday meeting was set after President Donald Trump said to CNBC on Thursday that he expected Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman to announce a deal to cut production by up to 15 million barrels, and that he had spoken to both countries’ leaders.

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