Oil Drops 4% As OPEC Meeting To End Saudi-Russia Price War Is Postponed

Oil prices dropped significantly late Sunday as the Organization of the Petroleum Exporting Countries meeting scheduled for Monday was postponed.

What Happened

The OPEC meeting, meant to resolve differences between the Kingdom of Saudi Arabia and the Russian Federation, has been rescheduled for Thursday, as officials from both countries exchanged jibes over the weekend.

Russia's President Vladimir Putin blamed the oil crash on Saudi Arabia's violation of years-old OPEC+ agreement, as reported by CNBC.

Saudi Foreign Minister Prince Faisal bin Farhan said Putin's comments were "devoid of truth," according to CNBC.

President Donald Trump last week had suggested that the two countries were on the verge of reaching an agreement and could slash oil supply by 10 million to 15 million barrels.

Russia's disagreement with the OPEC decision to cut oil supply in early March resulted in a price war with Saudi Arabia that significantly drove down the market prices. The novel coronavirus (COVID-19) pandemic added to the market slump as the demand for oil was further reduced.

Price Action

The drop in oil prices on Monday comes after the commodity posted major gains over the last week as the two major OPEC powers signaled progress in their talks over cutting output.

The United States West Texas Intermediate futures traded 4.02% lower at $27.20. Brent Oil futures traded 2.4% lower at $33.29.