Opec+ deal failure sends oil spiraling
Brent price falls from $45/bl to $25/bl in early trade, before partial recovery to $36/bl at 10am, as production surge threatened amid weak demand
Global oil markets were sent into turmoil on Sunday off the back of the Opec+ group’s failure to agree a production reduction target. It signals an end to the post-2016 policy of protecting price at the expense of losing market share, and implies the group could produce far more than expected at a time of sharply falling demand. Poor oil demand forecasts had weakened sharply due to the spread of Covid-19, on top of an already subdued outlook. “The potential for a strong recovery remains a distant prospect,” says Niamh McBurney, head of Mena at global risk consultancy Verisk Maplecroft. “A production free-for-all has the potential to hurt vulnerable Opec producers, such as Iraq and Nigeria
Also in this section
26 April 2024
While the US has been breaking records for its premium grade crude, there are doubts over whether you can have too much of a good thing
26 April 2024
Slowing demand growth and capacity expansions will squeeze refiners in coming years
25 April 2024
Some companies with assets in Israel have turned towards Egypt as tensions escalate, but others are holding firm despite rising tensions
24 April 2024
But even planned exploration activity is unlikely to reverse declining output from mature fields