* OPEC+ delays meeting on output cuts to April 9
* Kremlin says Russia is ready for oil market cooperation
* U.S. inventories at Cushing rise by record last week
-Genscape
(Adds closing prices)
By Scott DiSavino
NEW YORK, April 6 (Reuters) - Oil prices slumped on Monday,
pulling back from last week's gains after Saudi Arabia and
Russia delayed a meeting of oil producers aimed at resolving
growing worldwide oversupply as the coronavirus pandemic pummels
demand.
The global oil market rebounded over 35% last week after
sources at the Organization of the Petroleum Exporting Countries
(OPEC) and its allies, including Russia, said they are close to
a deal on oil output cuts to reduce a global glut, though they
want participation from the United States and others.
However, the meeting of the OPEC+ group, originally
scheduled for Monday, has been delayed to Thursday as sniping
between Russia and Saudi Arabia over last month's collapse of an
existing supply-cut agreement continued. Fuel demand is down by
roughly 30% worldwide due to the coronavirus while those nations
are flooding markets with unneeded supply.
"The delay in the OPEC+ meeting sparked much of today's
selloff as a result of major philosophical differences between
Russia and the Saudis that will likely preclude a deal on
Thursday," said Jim Ritterbusch, president of Ritterbusch and
Associates in Galena, Illinois.
On Monday, Kirill Dmitriev, one of Moscow's primary oil
negotiators, said that Russia and the Saudis were close to a
deal to cut output.
Brent futures LCOc1 settled $1.06, or 3.1%, lower at
$33.05 a barrel, while U.S. West Texas Intermediate (WTI) crude
CLc1 fell $2.26, or 8%, to end at $26.08.
U.S. prices fell more than global benchmark Brent after a
report from data provider Genscape showed that inventories at
the Cushing storage hub in Oklahoma, the delivery point for WTI,
rose by about 5.8 million barrels last week, traders said.
If those figures are matched by official U.S. Energy
Information Administration data on Wednesday, it would be the
fifth straight weekly storage build at the hub and the biggest
weekly increase on record dating to 2004. EIA/S USOICC=ECI
ENERGYUSA
"Global storage tanks will continue to get filled and once
storage capacity is reached, oil prices could enter free fall,"
said Edward Moya, senior market analyst at OANDA in New York.
"OPEC+ might have a couple months before global storage capacity
is reached, so production cuts will have to happen no matter
what."
OPEC+ is working on a deal to cut production by about 10% of
world supply, or 10 million barrels per day (bpd), but members
states want that to be a global effort, one that would pull in
nations that do not normally restrict supply of private oil
companies, particularly world production leader the United
States.
Rystad Energy's head of oil markets Bjornar Tonhaugen said
even if the group agrees to cut up to 15 million bpd, "it will
only be enough to scratch the surface of the more than 23
million bpd supply overhang predicted for April 2020."
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Goldman Sachs on oil demand destruction Image https://tmsnrt.rs/3bc3Z5L
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