Crude prices dive by 10% as three-year pact between Opec and Russia ends in acrimony
The oil price fell 10 per cent as a row between producers added to fears over the impact of coronavirus.
Crude sank to $45.28 a barrel, having been trading above $50 earlier in the day and at close to $60 two weeks ago.
Oil has now fallen more than 30 per cent this year.
Crude sank to $45.28 a barrel, having been trading above $50 earlier in the day and at close to $60 two weeks ago. Oil has now fallen more than 30 per cent this year
The latest sell-off came as a three-year pact between Opec and Russia ended in acrimony after Moscow refused to support deeper cuts to production.
The oil price has tumbled amid fears that a sharp global slowdown will hit demand.
Opec members including Saudi Arabia wanted to cut production to prop up prices. But Russia, part of a wider group known as Opec plus, refused.
Bjoernar Tonhaugen, of Rystad Energy, said: ‘This is an unexpected development that falls far below our worst case scenario and will create one of the most severe oil-price crises in history.’
The deal collapse raises the prospect of oil production increasing despite subdued demand.
Ann-Louise Hittle, vice president at Wood Mackenzie, said: ‘This is a psychological blow. And the market is now facing the spectre of unrestrained production.
‘The lack of a production deal carries risk. This would become apparent if global economic growth weakens and oil demand continues to contract more sharply than expected.’