Oil prices pull back after OPEC and Russia delay discussions on cutting output

Oil prices fell on Monday after Saudi Arabia and Russia delayed a meeting to discuss output cuts that could help to reduce global oversupply as the coronavirus pandemic pummels demand.

Brent crude fell more than $3 US when Asian markets opened but recovered some ground, with traders hopeful a deal between the top producers was still within reach.

Brent was down 81 cents, or 2.4 per cent, at $33.30 US a barrel. U.S. crude was 65 cents, or 2.3 per cent lower, at $27.69 a barrel, after having earlier been as low as $25.28.

The Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, are expected to meet on Thursday, instead of Monday, to discuss cutting production.

"Perhaps it is best that the meeting was delayed for producers to cement a minimum of common ground before the actual discussions take place on Thursday," BNP Paribas analyst Harry Tchilinguirian said. He noted initial disappointment at the delay had driven down prices in Asian business.

Kremlin spokesperson Dmitry Peskov said Moscow was ready to co-ordinate with other oil exporting countries to help stabilize the market and that the OPEC+ meeting was delayed for technical reasons.

OPEC+ is working on a deal to cut production by about 10 per cent of world supply, or 10 million barrels per day (bpd), in what member states expect to be an unprecedented global effort.

But Rystad Energy's head of oil markets, Bjornar Tonhaugen, said even if the group agrees to cut up to 15 million bpd, "it will only be enough to scratch the surface of the more than 23 million bpd supply overhang predicted for April 2020."

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