OPEC+ meeting delayed as Saudi Arabia and Russia row over oil price collapse: sources

OPEC and Russia have postponed a Monday meeting to go over oil output cuts until April 9, OPEC sources said on Saturday, as a dispute between Moscow and Saudi Arabia over who's to be blamed for plunging crude prices intensified.

The delay came amid pressure from U.S. President Donald Trump for the business of the Petroleum Exporting Countries led by Saudi Arabia and its allies, an organization collectively referred to as OPEC+, to urgently stabilise global oil markets.

Oil prices hit an 18-year low on March 30 because of a slump popular caused by lockdowns to support the coronavirus outbreak and the failure of OPEC and other producers led by Russia to increase a deal on output curbs that expired on March 31.

OPEC+ is focusing on a deal to slice the production of oil equivalent by about 10per cent of world supply, or 10 million barrels each day, in what member states be prepared to be an unprecedented global effort like the United States.

Washington, however, has yet to generate a commitment to join the effort and Russian President Vladimir Putin on Friday put the blame for the collapse in prices on Saudi Arabia - prompting a company response from Riyadh on Saturday.

"The Russian Minister of Energy was the first ever to declare to the media that the participating countries are absolved of their commitments beginning with the to begin April, leading to your choice that the countries have taken to improve their production," Saudi Energy Minister Prince Abdulaziz bin Salman said in a statement reported by state news agency SPA.

Putin, speaking on Friday throughout a video conference with government officials and the heads of major Russian oil producers, said the first reason behind the fall in prices was the impact of the coronavirus on demand.

"The second cause of the collapse of prices may be the withdrawal of our partners from Saudi Arabia from the OPEC+ deal, their production increase and information, which came out at the same time, about the readiness of our partners to even provide a discount for oil," Putin said.

The Saudi Foreign Minister Prince Faisal bin Farhan Al Saud disputed Putin's claims, saying Russia had withdrawn and that statements about the kingdom's withdrawal from the OPEC+ deal was without truth, state agency (SPA) reported on Saturday.

OPEC sources, who asked not be identified, said the emergency virtual meeting planned for Monday may likely now be postponed until April 9 to permit additional time for negotiations.

OPEC sources later downplayed the Saudi-Russia row, saying the atmosphere was still positive, although there was no draft deal yet nor agreement on details for instance a reference level that to make the production cuts.

"The first problem is that people have to cut from the existing production level now, not to go back to the one prior to the crisis," among the OPEC sources said. "The second issue may be the Americans, they have to play a part."

OIL RISES FROM LOWS

Oil recovered out of this week's lows of US$20 per barrel with Brent settling at US$34.11 on Friday, still far below the US$66 level at the end of 2019. Prices had their biggest one-day gain ever on Thursday when Trump said he expected Russia and Saudi Arabia to announce a significant production cut.

The United States isn't part of OPEC+ and the thought of Washington curbing production is definitely viewed as impossible, not least as a result of U.S. antitrust laws.

Still, the oil price crash has spurred regulators in Texas, the heart of U.S. oil production, to consider regulating output for the first time in practically 50 years.

But U.S. Energy Secretary Dan Brouillette, in a call with oil industry leaders on Friday, didn't mention the opportunity of U.S. production cuts, a source who paid attention to the call said.

On Saturday, U.S. President Donald Trump focused instead on tariffs as a reply to the oil price crash.

"If I want to do tariffs on oil coming from outside or easily have to do something to protect our ... thousands of energy personnel and our great companies that produce all these jobs, I'll do whatever I must do," Trump told reporters in a briefing about the coronavirus outbreak.

"The President has told us what Plan B is: tariffs," said Robert McNally, president of Rapidan Energy Group in Bethesda, Maryland.

Russian Energy Minister Alexander Novak told Russian state media he understood that america had legal restrictions on output cuts nonetheless it should be flexible.

Other oil producers that usually do not belong to OPEC+ have indicated a willingness to greatly help. Canada's Alberta province, home to the world's third-largest oil reserves, is available to joining any potential global pact.

Norway, Western Europe's major coal and oil producer, said on Saturday it could consider cuts to its oil output if a broad global deal is agreed.

Mexican President Andres Manuel Lopez Obrador on Saturday called on Russia and Saudi Arabia to attain a deal soon to get rid of their price war.

The International Energy Agency warned on Friday that a cut of 10 million bpd would not be adequate to counter the huge fall in oil demand. Despite having such a cut, inventories would increase by 15 million bpd in the next quarter.