Global oil prices fell sharply Friday after energy ministers from Saudi Arabia and Russia confirmed plans to ease production cuts in order to offset supply shortfalls from Venezuela in a coordinated effort to sooth concerns over rising crude costs.
Speaking at an economic conference in St. Petersburg, both Khalid al Falih, Saudi Arabia's powerful energy minister, and Russia's Alexander Novak said the output changes would be gradual, but wouldn't define the daily additional barrels of oil to the market until OPEC minsters met and discussed the terms at their meeting next month in Vienna
Brent crude futures for July delivery fell more than $2 per barrel following the statements, taking the global benchmark for prices to $76.79 per barrel by mid-day trading in London. WTI futures contracts for the same month, which are more tightly connected to U.S. gasoline prices, fell $1.31 a barrel to $69.40.
Oil prices are actually on pace for their first weekly decline in four, with prices pressures coming from a stronger U.S. dollar, which has gained 0.56% against a basket of six global currencies since early Tuesday, and data from the Energy Information Administration, which showed domestic crude stocks rose by a much larger-than-epected 5.8 million barrels last week
Global oil prices have risen more than 15%, or about $10 a barrel, far this year as investors re-set expectations for supply from key producers amid the threat of U.S. sanctions linked to Iran's alleged violations of a previous nuclear treaty.
The sanctions could take a further 250,000 to 500,000 barrels of crude from the market each day, pushing prices even high amid a broader OPEC agreement, first signed in December 2016, that has trimmed output by 1.8 million barrels each day until at least the end of the year.