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Moscow (MEMO) – Oil prices slumped on Monday, pulling back from last week’s gains after Saudi Arabia and Russia delayed a meeting of oil producers aimed at resolving growing worldwide oversupply as the coronavirus pandemic pummels demand.

The global oil market rebounded last week after sources at the Organisation of the Petroleum Exporting Countries and its allies, including Russia, said they were willing to come together to cut supply, though they want participation from the United States and others.

However, the meeting of the OPEC+ group, originally scheduled for Monday, has been delayed to Thursday as the sniping between Russia and Saudi Arabia over last month’s collapse of an existing supply-cut agreement continued. Fuel demand is down by roughly 30% worldwide while those nations are flooding markets with unneeded supply.

“The three-day delay in the virtual OPEC+ meeting that had been scheduled for (Monday) likely reduces the chances of a meaningful production agreement by at least 50%,” said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois.

US Energy Secretary Dan Brouillette said on Monday that after speaking with the energy ministers of Saudi Arabia and Russia he believes the countries will cut oil output and end their war over market share this week.

Related: Saudis Forced to Import Oil for Over a Year Following Aramco Attack

Kremlin spokesman Dmitry Peskov also said Moscow was ready to coordinate with other oil-exporting countries to help stabilize the market and that the OPEC+ meeting was delayed for technical reasons.

OPEC+ is working on a deal to cut production by about 10% of world supply, or 10 million barrels per day (bpd), but members states want that to be a global effort, one that would pull in nations that do not normally restrict the supply of private oil companies, particularly world production leader the United States.

Monday’s slump in crude benchmarks came after a strong surge on April 2-3, with Brent gaining 38% and WTI 40% over the two days as the market reacted to US President Donald Trump’s tweets that a deal to cut output was imminent.

This post was originally written for and published by Middle East Monitor and appears here under a creative commons license.

Image: The Kremlin

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