U.S. West Texas Intermediate and international-benchmark crude oil futures are down more than 6% on Friday after Russia said it will not agree to steeper oil production cuts by OPEC and its allies to support prices in the face of a huge decline in oil demand due to the rapidly spreading coronavirus outbreak, Reuters reported.
The selling pressure was strong enough to take out Brent crude oil’s earlier weekly low, driving prices to their lowest levels since 2015. WTI crude oil, held its weekly low at $43.85, just slightly above its January 20, 2016 main bottom at $43.55.
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+.
Most Analysts Not Surprised by Russian Rejection of Plan
On Thursday OPEC pushed for crude output by OPEC and its allies – a group known as OPEC+ - to be cut by an extra 1.5 million barrels per day (bpd) in total until the end of 2020. The call came ahead of an OPEC+ meeting scheduled for Friday in Vienna.
Non-OPEC states were expected to contribute 500,000 bpd to the overall extra cut, OPEC ministers said. But Russia and Kazakhstan, both members of OPEC+, said they had not yet agreed to the deeper cut, raising the risk of a collapse in cooperation that has propped up crude prices since 2016, Reuters reported.
Early in the session…