The oil market is experiencing one of its worst days … Prices are in free fall

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Oil prices fell by more than 10% to their lowest levels in years, during trading on Friday, after OPEC and its allies failed to reach a new agreement to reduce production, in order to face the pressures faced by the market due to the spread of the Corona virus.

Brent crude futures fell more than 9% to $ 45.18 a barrel, an unprecedented level since June 2017, while US NYMEX crude contracts fell more than 10% to $ 41.28, the lowest level since August / August 2016. It is also the worst daily performance of contracts in more than 5 years.

The meeting between “OPEC” and its allies, known as “OPEC +”, ended without agreement Additional cuts to production, And the organization and its allies agreed to meet again to monitor the situation.

The current production reduction agreement will be in place until the end of March, as planned, but it is not certain whether it will continue beyond this month.

For his part announced Russian Energy Minister, Alexander Novak, That “OPEC +” will continue to work within the framework of the cooperation pact, while there is no obligation to reduce oil production from the first of April of this year.

Novak told reporters while leaving the OPEC building: “We have just signed a joint document that provides for our continued work and cooperation within the framework of the Charter (the Charter of Cooperation indefinitely within the framework of OPEC +).”

The Russian minister explained, “With regard to reducing (reducing oil production), probably taking into account the decision taken today, beginning April 1 of this year, OPEC countries and non-OPEC countries are not obligated to reduce production.”

The Russian Energy Minister emphasized that Russia’s raising of oil production now depends on the plans of Russian companies, but the Russian Energy Ministry has not discussed this option with them yet.

Sources confirmed to “Sputnik” that Russia It agreed to act according to the agreement of the “OPEC +” coalition, but there is no final position on any additional oil production cuts.

In a related context, the “OPEC” countries adopted, on Thursday, a recommendation to agree in the meeting of the “OPEC +” coalition, today, Friday, to reduce additional production in the second quarter by 1.5 million barrels per day with a return in the second half to the current terms of the deal.

“OPEC” stressed that it is ready to reduce production by one million barrels per day, and suggests to the allies in the “OPEC +”, that they take on the remaining 500 thousand barrels, including Russia.

For his part, Ali Al-Riyami, a member of the Omani delegation to the negotiations in Vienna, announced that there is no alternative plan for the OPEC + coalition after the talks failed, today, Friday.





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