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Oil Prices Drop As Doubts Grow Over Oil Deal

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Oil Prices Drop As Doubts Grow Over Oil Deal

Oil prices dropped sharply yesterday after a meeting to discuss output cuts between the Organisation of the Pe­troleum Exporting Countries (OPEC) and its allies was delayed, dimming hopes of swift action to support coro­navirus-ravaged energy markets.

US benchmark West Texas In­termediate plunged eight percent at the open in Asia, but clawed back some ground and was trading 5.7 percent lower, at $26.72 a barrel.

International benchmark Brent crude was down 4.3 per­cent to trade at $32.64 per barrel.

Oil prices have tumbled to levels not seen for years due to the corona­virus pandemic and a price war be­tween Russia and Saudi Arabia, the kingpin of exporting group OPEC.

Business shutdowns, travel restrictions and other measures put in place to contain the virus out­break have battered demand.

Prices had bounced back from 18-year lows last week after US President Donald Trump said that Riyadh and Moscow would draw a line under their dispute and agree to major output cuts.

Analysts had been skeptical about a quick resolution, and doubts only grew when the meet­ing between OPEC and its allies, including Russia, was delayed.

They had been expected to meet via video conference to discuss oil production cuts on Monday, but the meeting has been postponed to Thurs­day, the government of energy-rich Azerbaijan said at the weekend.

Trump surprised investors last week by tweeting: “I expect & hope” Riyadh and Moscow will be cutting back “approximately 10 Million Bar­rels, and maybe substantially more”.

On Friday, Moscow said it was pre­pared to discuss a reduction in the vol­ume of about 10 million barrels a day.

But Stephen Innes, chief global markets strategist at AxiCorp, said that “traders remain extremely sceptical a deal will be forthcoming, and if one does occur, it will be woefully insuffi­cient to stem the oil supply gushers.”

(c) 2020 Daily Independent. All rights reserved. Provided by SyndiGate Media Inc. (Syndigate.info).

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