Oil prices are plunging as Russians and Saudis rethink output caps

Oil prices fell sharply on Friday after Russia’s oil minister said a group of two dozen producer nations could soon begin easing the production limits they put in place last year to drain a global crude glut.

Russian Energy Minister Alexander Novak met with his Saudi counterpart, Khalid Falih, met in St. Petersburg to discuss the deal, which has aimed to keep 1.8 million barrels a day off the market since January 2017. The parties are now considering a gradual exit to that deal to compensate for falling production in crisis-stricken Venezuela and anticipated export disruption from Iran, which faces renewed U.S. sanctions.

“The moment is coming when we should consider assessing ways to exit the deal very seriously and gradually ease quotas on output cuts,” Novak said in televised comments, according to Reuters.

U.S. West Texas Intermediate crude prices dropped below $69 a barrel, slipping further from this week’s peak of $72.83, its highest since November 2014. They were down $1.90, or 2.7 percent, at $68.81 at 9:07 a.m. ET.

Meanwhile, Brent crude fell $1.84 or 2.3 percent, to $76.95. The international benchmark for oil prices last week hit a 3½-year high of $80.50, also going back to November 2014.

Brent is down 2 percent this week, on track to break a six-week winning streak. U.S. crude is down more than 3 percent for the week.