London: Oil prices dropped below $50 a barrel in New York for the first time in more than a year as traders fretted that the Organization of the Petroleum Exporting Countries (Opec) won’t act decisively to clear a resurgent surplus in the global crude market.

All eyes are on this weekend’s G20 summit in Argentina, where Russia’s Vladimir Putin and Saudi Arabia’s Mohammed bin Salman are likely to discuss how to coordinate oil policy, but both leaders have reasons for caution. Shielded by a budget surplus and a weak ruble, Putin said Wednesday current prices suit Russia fine. The crown prince, under pressure after the killing of Jamal Khashoggi, can’t afford to alienate US President Donald Trump.

Beyond politics, production from Saudi Arabia and America’s shale mean inventories are starting to rise again. US crude stockpiles have now increased for 10 consecutive weeks. Opec, Russia and other producers are due to meet in Vienna next week to discuss production policy for 2019.

“Putin is fine with $60, but this time next week we will be well below that if there is no deal," said Warren Patterson, commodity strategist at ING. “I think we are going to have to see the Saudis actively reduce flows to the US."

Futures tumbled as much as 1.8 %percent in New York to $49.41 a barrel, the lowest since early October 2017. The contract for January delivery was at $49.62 at 9.33am London time and volume was more than double the 100-day average.

Brent for January settlement, which expires Friday, fell as much as 2.1% to $57.50 a barrel on London’s ICE Futures Europe exchange. The global benchmark traded at an $8.23 premium to WTI.

The more-active February contract lost as much as 2.2%.

While Putin praised Saudi Crown Prince Mohammed Bin Salman and said Moscow is ready to cooperate further, he said crude around $60 a barrel is “balanced and fair" and well above the level needed to keep his government’s budget in surplus.

In the US, crude stockpiles rose by 3.58 million barrels last week in the longest run of gains since November 2015, according to the Energy information Administration. The build was higher than the one-million-barrel gain predicted in a Bloomberg survey, overshadowing a surprise draw in gasoline inventories.

“Oil has moved into our bear case scenario," said Norbert Ruecker, head of macro and commodity research at Julius Baer Group Ltd. in Zurich. “Today’s price levels imply that the petro-nations will maintain their output hikes or that the world economy is about to slow down significantly."

Bloomberg’s Tsuyoshi Inajima and Alex Longley contributed to this story.

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.