The price of crude oil remains volatile amid the ongoing crisis in the global economy.
OPEC+ countries (which includes formal OPEC member states and allies such as Russia and more) managed to agree to cut 9.7 million barrels per day in an effort to curb supply. However, experts have repeatedly warned that the decrease in demand caused by the coronavirus pandemic is deeper than that, meaning these cuts will be insufficient to balance the market.
Even after OPEC+ announced its decision to cut supply, oil prices did not significantly improve. They remain roughly 50% lower than before the Covid-19 outbreak began. In fact, instead of stabilizing the price of oil, the deal led to a 10% decrease in the following days.
Earlier today, the price of oil was increasing due to hopes that further cuts will be negotiated soon. Russia and Saudi Arabia seemed to have both signalled their readiness to commit to deeper production cuts.
According to OPEC’s own report, oil right now and in the near future is approaching the lowest demand level in 30 years. Oil prices are near 20-year lows due to the current situation.
As of this morning, the WTI is trading at $19.93, while the Brent crude is at $28.42 per barrel.
