Oil rally snapped on doubts Russia will agree supply cut deal with Saudi Arabia

Oil gave up some of last week’s rally after a delay to a planned meeting of top producers to discuss output curbs and signs the U.S. won’t join any deal raised doubts over the prospects for an agreement.

West Texas Intermediate declined 3.9% to $27.23 a barrel on the New York Mercantile Exchange as of 11:18 a.m. in Singapore after dropping to $25.28 earlier. The contract surged 32% last week and has fallen 55% in 2020.

Brent crude fell 2.4% to $33.29 a barrel on the ICE Futures Europe exchange. It rallied 37% last week and is down 50% so far this year.

The contract’s six-month contango deepened to around $5 a barrel from $3.96 on Friday, indicating an abundance of supply.

Futures dropped around 4% in New York after surging by more than a third of their value over the previous two sessions as a production accord started to take shape.

However, a virtual gathering of the OPEC+ alliance that was originally scheduled for Monday was postponed to Thursday as Saudi Arabia and Russia traded barbs over who was to blame for the collapse in oil prices.

Some progress was made toward an agreement on Sunday, according to diplomats, but the lack of participation from the U.S. — the world’s largest producer — could prove to be a stumbling block.

Despite originally calling for the deal, President Donald Trump on Saturday described OPEC as a cartel and threatened tariffs on foreign oil. Trump said late Sunday in Washington that he could impose “very substantial” levies but doesn’t think he’ll need to.

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