Oil prices fell sharply Friday after influential energy ministers 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 Al-Falih, 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 $68 a barrel, slipping further from this week's peak of $72.83, its highest since November 2014. The contract finished the session down $2.83, or 4 percent, at $67.88 a barrel.
Meanwhile, Brent crude fell $2.42, or 3.1 percent, to $76.37 by 2:27 p.m. ET. 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 nearly 3 percent this week, on track to break a six-week winning streak. U.S. crude is down almost 5 percent for the week.
"Today's low at $67.50 was an important support level, but really to change the complexion of the chart fullsomely you need to get under $66," said John Kilduff, founding partner at energy hedge fund Again Capital.
"Then the year long uptrend channel will have been broken and you'd look for even lower prices from there, targeting $60 to $62."
The ministers are considering a supply increase of as much as 1 million barrels a day to cool the market, sources told Reuters. Al-Falih is particularly concerned about the impact of oil prices above $80 a barrel on consumer nations like China and India, the news agency reported.
The move to potentially ease the production caps follows news reports that Saudi Arabia was roughly targeting $80 a barrel to support domestic initiatives. Those reports helped bolster crude prices within the last two months.
But it now appears that prices accelerated "too far, too fast," said Matt Smith, head of commodities research at shipping intelligence firm ClipperData.
"They've reached their target and it now seems as if they're pulling the levers to try to keep prices around this $80 mark," he said. "The $80 mark is not too hot, not too cold, but just right."
Oil prices struck new multiyear highs after President Donald Trump announced the United States would withdraw from a 2015 nuclear deal with Iran and restore punishing sanctions on the country, OPEC's third-biggest producer.
The administration's hawkish tone since then has raised concerns about substantial supply disruptions from Iran, despite efforts by the European Union to preserve the accord.
Meanwhile, output continues to decline in Venezuela, which re-elected President Nicolas Maduro this week, prompting fresh U.S. sanctions. Venezuela is mired in a devastating economic crisis that has hobbled its ability to tap its lifeblood oil reserves.
In the United States, output continues to rise toward 11 million barrels per day, with U.S. drillers threatening to unseat Russia as the world's top producer. However, bottlenecks in the Permian basin, the nation's biggest shale oil producing region, mean U.S. drillers may fail to meet growing global demand for petroleum.
Crude futures continued to slide after data from oilfield services company Baker Hughes showed U.S. drillers added 15 oil rigs in the last week. The total U.S. rig count now stands at 859.
The pause in the oil price rally could be good news for drivers. The national average for regular gasoline in the United States has risen to nearly $3 a gallon, the highest level since 2014, prior to a historic oil price crash.