Global oil prices have dropped on Monday after Saudi Arabia and Russia postponed a meeting about a deal to cut output as the virus pandemic hits demand, CNBC reported.
The two countries have been locked in an oil price war for the last month.
Traders are concerned that, with large parts of the world in lockdown, there will be too much crude available, putting pressure on prices.
Last week, crude prices soared after U.S. President Donald Trump suggested that an agreement was imminent.
In Asian trade, the global benchmark Brent crude fell 12%, while U.S.-traded oil, known as West Texas Intermediate, was more than 10% lower.
Measures in countries across the world to slow the spread of the coronavirus, including the U.S., UK and much of mainland Europe and Asia, have seen global energy demand fall sharply.
The delay is likely to hit oil prices next week following a record-setting comeback week for crude. U.S. oil surged 25% on Thursday for its best day on record, and gained another 12% on Friday. It finished the week with a 32% surge, breaking a 5-week losing streak and posting its best weekly performance ever, back to the contract’s inception in 1983.
“It’s probably going to crater,” Again Capital’s John Kilduff said. “There was a lot of optimism priced into oil Thursday and Friday. With this new Saudi, Russia spat, it doesn’t look like it’s going to come together.”
Despite last week’s surge, West Texas Intermediate crude is still down nearly 40% in the last month on the heels of demand destruction from the coronavirus outbreak, and the ongoing price war.
