Oil prices moved between gains and losses in early trading as traders continue to fear excess supply in the market.
U.S. West Texas Intermediate crude was unchanged at $31.14. Earlier in the session prices had been down nearly 3%, before briefly paring losses to turn positive.
During Monday’s trading session, WTI and international benchmark Brent crude posted their worst declines since 1991, dropping 24.59% and 24.1%, respectively.
The steep sell-off comes amid escalating tensions between Saudi Arabia and Russia, which traders fear could lead to an excess supply of crude.
On Friday, OPEC ally Russia rejected the additional 1.5 million barrel per day production cut that the 14-member cartel proposed. After the unsuccessful talks concluded, OPEC’s de facto leader Saudi Arabia on Saturday slashed its official oil prices as it reportedly gets set to ramp up production.
The current production cuts expire at the end of March, which means that beginning April 1 nations can pump as much oil as they want.
This potential supply glut comes at a time when prices were already suppressed thanks to the coronavirus outbreak. A slowdown in travel has already hit demand, and a global economic slowdown could depress oil further.