After a massive rally higher last week, crude oil prices fell on Monday, to stabilize in the $20-30 range amid ongoing confusion around the prospect of production cuts heralded by President Trump last week.
The move lower resulted even as the CEO of Russian sovereign wealth fund RDIF reported to CNBC that Moscow and Riyadh were “very close” to an oil deal and as Russia supposedly claimed it was ready to slash output, according to Reuters.
U.S. West Texas Intermediate futures dropped 7.97% to settle at $26.08 per barrel, while international benchmark Brent crude futures slipped 2.8% to trade at $33.17.
Crude Oil ETFs also relinquished some of the incredible gains made last week, with the United States Oil Fund LP (USO) falling 8.22%, while leveraged fund, ProShares Ultra Bloomberg Crude Oil (UCO) dropped 16.39% as of 2:30 PM Eastern time Monday.
After crude oil exploded higher on Thursday following President Trump’s indication that key oil producers could cut back supply, crude continued to run higher Friday, approaching $29 a barrel earlier in the session.
Oil producers from the OPEC+ coalition were considering the option of cutting back global crude oil production by 10 million BPD in coordination with outside producers, according to an OPEC source relayed via Reuters on Friday. The ultimate cut was hinging on the outcome of the meeting of President Trump with U.S. oil firms over the weekend, Reuters’ source said.