Oil prices slid more than 3% on Friday after a report that Russia will not agree to steeper oil output cuts by the Organization of the Petroleum Exporting Countries and its allies to support prices in the face of a slump in oil demand because of the global coronavirus outbreak.
Brent and WTI crude futures tumbled by nearly $3 a barrel after the report. Early Friday morning, Brent crude was down $1.74, or 3.4%, at $48.25 U.S. a barrel. U.S. West Texas Intermediate (WTI) was down $1.56, or 3.4%, at $44.34.
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+.
OPEC held talks with its allies on Friday after the group told Russia and others that it favored an additional 1.5 million barrels per day (bpd) of cuts until the end of 2020.
Non-OPEC states were expected to contribute 500,000 bpd to the overall extra cut, OPEC ministers said. The new deal would mean OPEC+ production curbs amounting to a total of 3.6 million bpd, or about 3.6% of global supply.
Some analysts had expected Moscow to endorse the agreement. Global stock markets tumbled on Friday as disruptions to business from the spreading coronavirus epidemic worsened. European shares opened sharply lower, with travel stocks bearing the brunt.
Even with the deeper cut, Goldman Sachs said the OPEC+ deal would not have prevented a global oil market surplus in the second quarter. The bank maintained its Brent price forecast at $45 U.S. a barrel in April.
