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Home BUSINESS ENERGY Oil Prices Drop, as Russia Downplays Additional OPEC+ Cuts

Oil Prices Drop, as Russia Downplays Additional OPEC+ Cuts

Oil prices fell more than $3 at one point on Thursday, after Russian Deputy Prime Minister Alexander Novak played down the prospect of further OPEC+ production cuts at its meeting next week.

Brent crude futures were down $2.85, or 3.6%, to $75.51 a barrel by 12:08 p.m. EDT (1708 GMT). U.S. West Texas Intermediate crude (WTI) fell $2.99, or 4%, to $71.35. At their session low, both benchmarks were down by more than $3.

Oil prices began falling after Novak was quoted saying he did not think additional OPEC+ cuts were likely.

“I don’t think that there will be any new steps, because just a month ago certain decisions were made regarding the voluntary reduction of oil production by some countries…” Novak was quoted as saying by Izvestia newspaper.

In recent days, top OPEC+ producers have given a raft of conflicting messages about next oil policy moves, making it difficult to predict the outcome of the next meeting.

On Tuesday, oil prices were supported when Saudi Arabia’s energy minister warned that short-sellers betting oil prices will fall should “watch out” for pain.

Some investors took that as a signal that OPEC+, the Organization of Petroleum Exporting Countries and allies including Russia, could consider further output cuts at a meeting on June 4.

“It’s now OPEC+ producers experiencing the ‘ouch’,” said John Kilduff, partner at Again Capital LLC in New York.

Just a week before Prince Abdulaziz’s comment, Russian President Vladimir Putin said that oil production cuts were required to maintain a certain price level.

Uncertainty over the U.S. debt ceiling also weighed on prices and sent equities lower on Thursday.

Some progress had been made but several issues remained unresolved in negotiations, House Speaker Kevin McCarthy said on Thursday, as the deadline ticked closer to raise the federal government’s $31.4 trillion borrowing limit or risk default.

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