Oil prices slump as Opec and Russia consider output boost

new york — Oil prices fell more than $2 per barrel on Friday as Saudi Arabia and Russia discussed easing production cuts that have helped push crude prices to their highest since 2014.

Brent crude futures fell $2.35, or 3 per cent, to settle at $76.44 a barrel. The global benchmark lost about 2.7 per cent this week, its largest weekly drop since early April. The contract hit its highest since late 2014 at $80.50 last week.

US West Texas Intermediate (WTI) crude slumped $2.83, or 4 per cent, to finish at $67.88 a barrel. For the week, WTI tumbled about 4.9 per cent, its biggest loss since early February, a sharp course reversal after six weeks of gains.

The premium of Brent to WTI hit $8.75 per barrel in post-settlement trade, its widest since March 2015. The energy ministers of Russia and Saudi Arabia met in St Petersburg to review the terms of a global oil supply pact that has been in place for 17 months, ahead of a key Opec meeting in Vienna next month.

Russia’s energy minister said oil ministers from Opec states and non-Opec countries participating in a deal to cut output would likely decide to gradually ease curbs at their meeting in Vienna next month.

“After hitting that $80 level, which is a psychological level, we were seeing a little bit of a pullback yesterday,” said Matt Smith, director of commodity research at ClipperData.

Global crude inventories have fallen over the past year because of the Opec-led cuts, which were boosted by a dramatic drop in Venezuelan production. — Reuters