* For the week, Brent drops 2.7 pct and WTI down 4.9 pct
* Russian, Saudi oil ministers meet in St Petersburg
* Russia says oil output cuts likely to be eased at June
* U.S. drillers add most rigs in week since Feb -Baker
(Updates market activity)
By Stephanie Kelly
NEW YORK, May 25 (Reuters) – Oil prices fell more than $2
per barrel on Friday as Saudi Arabia and Russia discussed easing
production cuts that have helped push crude prices to their
highest since 2014.
Brent crude futures fell $2.35, or 3 percent, to
settle at $76.44 a barrel. The global benchmark lost about 2.7
percent this week, its largest weekly drop since early April.
The contract hit its highest since late 2014 at $80.50 last
U.S. West Texas Intermediate (WTI) crude slumped
$2.83, or 4 percent, to finish at $67.88 a barrel. For the week,
WTI tumbled about 4.9 percent, its biggest loss since early
February, a sharp course reversal after six weeks of gains.
The premium of Brent to WTI <WTCLc1-LCOc1> hit $8.75 per
barrel in post-settlement trade, its widest since March 2015.
The energy ministers of Russia and Saudi Arabia met in St.
Petersburg to review the terms of a global oil supply pact that
has been in place for 17 months, ahead of a key OPEC meeting in
Vienna next month.
The ministers, along with their counterpart from the United
Arab Emirates, discussed an output increase of about 1 million
barrels per day (bpd), sources told Reuters.
Russia’s energy minister said oil ministers from OPEC states
and non-OPEC countries participating in a deal to cut output
would likely decide to gradually ease curbs at their meeting in
Vienna next month.
“After hitting that $80 level, which is a psychological
level, we were seeing a little bit of a pull-back yesterday, and
then rhetoric out of Saudi and Russia has only exacerbated the
sell-off today,” said Matt Smith, director of commodity research
Global crude inventories have fallen over the past year
because of the OPEC-led cuts, which were boosted by a dramatic
drop in Venezuelan production.
The prospect of renewed sanctions on Iran after Trump pulled
out of an international nuclear deal with Tehran has further
supported prices in recent weeks.
This comes even as U.S. crude production has risen. The
United States in February produced 10.3 million bpd, a record.
The U.S. oil rig count, an indicator of future production,
rose by 15 to 859 in the week to May 25, the highest level since
March 2015, General Electric Co’s Baker Hughes energy
services firm said.
Hedge funds and other money managers raised their bullish
bets on U.S. crude futures and options in the latest week after
four consecutive cuts in the net long position, according to
data released on Friday.
The increase lifted the wagers from 6-month lows, in the
week to May 22, according to data from the U.S. Commodity
Futures Trading Commission (CFTC).
The speculator group raised its combined futures and options
position in New York and London by 2,009 contracts to 421,916
during the period.
(Additional reporting by Ron Bousso in London, and Henning
Gloystein and Roslan Khasawneh in Singapore
Editing by Marguerita Choy, Chris Reese and Diane Craft)