Oil prices plunged as Russia and OPEC split
Oil prices have already tumbled about 30% since the start of year. On Friday, oil prices plunged about 10%, as a proposal by OPEC collapsed.
The plan had been intended to stabilise price hit by economic fallout from the coronavirus, which affects travel, manufacturing and global supply chains.
OPEC was pushing for an additional 1.5 million barrels per day (bpd) of cuts until the end of 2020. Non OPEC states, such as Russia, had been expected to contribute 500,000 bpd to the overall extra cut, OPEC ministers said.
However, Russia declined to participate, with talks ending with no new deal to restrain production. Add a response, OPEC decided to remove limits on its own production.
The result triggered some of the biggest one-day falls in over a decade. According to Reuters, Brent futures had their its biggest daily percentage fall since December 2008, down $4.72, or 9.4%, to settle at $45.27 a barrel. It was Brent’s lowest closing price since June 2017.
The split between OPEC and Russia revived fears of a 2014 oil price crash, when Saudi Arabia and Russia fought for market share with U.S. shake oil producers, which have never participated in output-limiting pacts.