Oil slid on Tuesday after Russia dismissed the possibility of a deeper cut by Opec+ members.
Brent slid 0.58 per cent to $61.21 per barrel at 1.14pm UAE time, while West Texas Intermediate fell 0.84 per cent to $55.34 per barrel.
“The Opec+ mechanism has shown its effectiveness, but it is not infinitely effective,” Russian deputy energy minister Pavel Sorokin told state news agency Tass.
“There is still a limit on how much you can take on and what actions can be taken,” he added.
Alongside Saudi Arabia, Russia leads a global alliance of sovereign producers cutting back 1.2 million barrels per day of crude from the markets. The agreement known as the Opec+ alliance is expected to hold until next March.
However, Saudi energy minister Prince Abdulaziz bin Salman is prepared to make deeper cuts, according to the Nigerian minister of state for petroleum resources Timipre Sylva.
“He assured me that they are very ready to even cut deeper," he told Bloomberg TV.
The impact of the drilling slowdown in the US, with independent shale producers struggling to secure financing, will also be a consideration at the next Opec+ meeting, Mr Sorokin said.
Opec is set to convene in Vienna in early December for its annual gathering.
The Russian minister also said a return of Venezuelan or Iranian barrels to the market could cause an oversupply of as much as 2 million barrels per day and result in a sudden imbalance of markets.
Oil markets yesterday opened with less optimism with the anticipation of US crude stocks rising by about 700,000 bpd, according to a poll by Reuters, reversing the gains from the previous week.
Oil prices settled at a monthly high last Thursday after tighter inventory data and better prospects for a trade deal between the US and China steadied the market.
The industry-funded American Petroleum Institute was expected to release its data on stocks yesterday with the US Energy Informational Administration’s weekly report expected today.
Brent held above $61 during the first session of the week as markets remained optimistic about the US and China making progress on their trade differences.
The world’s two biggest economies, which are embroiled in a tit-for-tat tariff war, are inching closer to reaching a trade pact next month.
The US Trade Representative is considering a further extension of tariff suspension for about $34 billion worth of Chinese goods, which are said to expire on December 28, according to the agency.
China’s commerce ministry released a statement noting that negotiators from Beijing and Washington had “agreed to properly resolve their core concerns and confirmed that the technical consultations of some of the text agreement were basically completed”.
Beijing and Washington are expected to agree to a trade deal in Chile next month.
Inventory data from the EIA last week signalled a large drawdown of stocks for the first time in six weeks.
Crude stocks were down 1.7 million barrels for the week ending October 18, while oil supply from the country’s Strategic Petroleum Reserve fell by a million barrels during that period.
The data helped to reverse a bearish market for prices, remained depressed amid gloomy economic growth projections and revisions to oil demand growth.
