Oil prices skidded on Monday after negotiations between Saudi Arabia and Russia to cut output were delayed, keeping oversupply concerns alive, while stocks jumped as investors were encouraged by a slowdown in coronavirus-related deaths and new cases.
Brent crude fell as much as $3 in early Asian trading after OPEC, a group of main oil-producing countries led by Saudi Arabia postponed a meeting over a potential pact to cut production to Thursday.
The producers were initially set to meet on Monday, but that has now been pushed to April 9, after they blamed each other for the collapse of talks in March, with Saudi Arabia making a diplomatic attack on Russian President Vladimir Putin.
Investors previously hoped that the meeting would have resulted in cuts to oil production of about 10 million barrels per day.
“We continue to believe that it is going to be difficult for producers to agree on cuts, particularly in the region of 10 to 15 million barrels per day,” according to a commodities note from ING.
“Anything less than this would likely disappoint the market, given growing expectations last week, along with the deteriorating demand picture,” Warren Patterson, ING head of commodities strategy and Wenyu Yao, ING senior commodities strategist said.
“The deal really hinges on the United States though, with Russian participation dependent on the US contributing to cuts,” they said.
US President Donald Trump said he would impose tariffs on crude imports if that is needed to support the US oil sector.
Brent crude slipped close to $30 a barrel in early trade and was at $32.82 by 02:03 GMT, down $1.29, or 3.8 percent. West Texas Intermediate (WTI) crude fell $1.66, or 5.9 percent, to $26.68 a barrel, after earlier touching a low of $25.28.
Analysts said the news could lead to some sell-off in currency markets too, although movements are still being dictated by the spread of the coronavirus pandemic.
The United Kingdom’s pound sterling fell after Prime Minister Boris Johnson was admitted to the hospital following persistent coronavirus symptoms.
Also weighing on the pound were fears other senior government officials who were in the same briefing as Johnson could be affected by the virus, said Karl Schamotta, chief market strategist at Cambridge Global Payments in Toronto, Canada.
The pound fell 0.4 percent in early trade on Monday in a knee-jerk reaction and was last down 0.3 percent at $1.2222.