CNBC reports that the virtual meeting between OPEC and its allies scheduled for Monday, April 6, has been postponed as tensions mount between Saudi Arabia and Russia over production cuts.
Prices jumped 25% on Thursday and 12% yesterday on reports that OPEC (and its allies) were mulling a production cut equal to 10% of global supply while Vladimir Putin said a cut of 10M barrels a day seemed “possible.”
In March, OPEC proposed a cut of 1.5M barrels a day but Russia declined to go along. The meeting ended with no agreement so Saudi Arabic dropped its oil prices in retaliation and in an effort to grab market share, subsequently ramping up production to more than 12M barrels per day. Tensions between the two have escalated ever since.
Again Capital’s John Kilduff says, “It’s probably going to crater. There was a lot of optimism priced into oil Thursday and Friday. With this new Saudi, Russia spat, it doesn’t look like it’s going to come together.”