Hopes to support virus-ravaged markets dimmed as oil prices fell

Energy-markets all across the world stumbled again as oil prices lost its value following the oil-price war between Saudi Arabia and Russia. Donald Trump did try to diffuse tensions between the two oil giants but he was unable to conclude the rift.

Oil prices

Oil prices fell sharply Monday after a meeting to discuss output cuts between 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.

But 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”.

Read more: Trump signals end to price war as Oil prices rocket over 30%

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 skeptical a deal will be forthcoming, and if one does occur, it will be woefully insufficient to stem the oil supply gushers.”

AFP with additional input by GVS News Desk

Facebook Comments

blank