Oil plunges as Saudi Arabia, Russia output deal remains elusive

Meeting of G20 energy ministers slated for Friday

Oil prices have tumbled into negative territory as Russia and Saudi Arabia have yet to announce a production-cut agreement has been reached.

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Brent crude oil, the international benchmark, fell 0.85 percent to $32.86 a barrel while West Texas Intermediate, the U.S. benchmark, plunged 5.82 percent to $23.63. The energy components had gained as much as 11 percent and 13 percent, respectively, in the moments after reports of a deal surfaced.

The pact between the two sides, which are holding a virtual meeting due to travel and distancing restrictions amid the COVID-19 pandemic, would be one component of a broader effort to cut production by up to 20 million barrels per day, The Wall Street Journal reports.

Other major oil exporters had yet to agree to reductions.

“The 10-20 million range is a meaningful signal to the market, and all the other participants will take like action to stabilize production against the lower demand," Reid Morrison, energy lead at the consultancy firm PwC, told FOX Business. "It will have a normalizing effect on the market and on production levels."

WTI crude had previously plunged 60 percent from its Jan. 6 peak through Wednesday as the price war between Russia and Saudi Arabia exacerbated a supply glut while the COVID-19 pandemic crushed demand.

Saudi Arabia said last month it would increase production in April to 12.3 million barrels a day after pumping out 9.7 million barrels in March. The move followed Russia's refusal to agree to a production cut.

The Journal, citing sources, has reported that Russia would now reduce its production by 2 million barrels a day and Saudi Arabia would lower its output by 4 million barrels from April.

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A virtual meeting of energy ministers from the world’s 20 largest economies is slated for Friday to "foster global dialog and cooperation to ensure stable energy markets and enable a stronger global economy,” according to a statement from the G20.

This story is developing. Check back for updates.