Oil plunges to lowest since 2017 after Russia rejects steep OPEC cut

NEW YORK (Reuters): Oil prices tanked more than 7% on Friday to their lowest levels since mid-2017 after Reuters reported that Russia balked at OPEC’s proposed steep production cuts to stabilise prices.

A Russian high-level source told Reuters that Moscow would not back a call for extra reductions in oil output and would agree only to an extension of existing cuts by the Organisation of the Petroleum Exporting Countries and its allies, a group known as OPEC+.

“If this results in OPEC not going through with their own proposed 1 million bpd cuts in Q2, the result ... could be devastating. Brent could swiftly drop 15% to the low $40s and WTI to the high $30s in this scenario,” said Bjornar Tonhaugen, head of oil markets at Rystad Energy.

Brent futures fell $3.71, or 7.4%, to $46.31 a barrel by 10:23 a.m. EST (1523 GMT). US West Texas Intermediate (WTI) crude fell $3.41, or 7.4%, to $42.49.

Those prices were the lowest for Brent since July 2017 and for WTI since June 2017.