Oil Prices Plummet To 17-Year Low

Oil prices were further smashed in early trading at the commence to this week, falling to a 17-year low. The continued fears and also lockdowns, as a result of Covid-19 rippling through the world’s largest economies. It leaves the market overwhelmed by cratering demand and a growing surplus of crude. The demand for oil has dropped substantially since the start of 2020, on the back of the virus forcing economic limitations. Transportation remains extremely limited globally, lack of flights, cars on the board, general logistics. All of which are huge consumers of oil for fuel, which has resulted in huge stockpiles. Another factor that is forcing the prices lower is the fact that Saudi Arabia, Russia and also the U.S. continue to pump large amounts of oil into the market. Prices are heavily discounted in efforts to price each other out. The added weight to oil prices comes as Saudi Arabia signalled no breakthrough in the oil price war with Russia. On Friday, the two countries were still at a stalemate, with Saudi Arabia saying it was not in talks with Russia to stabilize oil markets despite the United States stepping in to pressure both sides to end the price war. As a recap, back in early March, OPEC and non-OPEC allies sometimes referred to as OPEC+, failed to agree on the terms of deeper supply cuts. It has greatly resulted in the fallout between OPEC kingpin Saudi Arabia and non-OPEC leader Russia, kickstarting the noted oil price war. We did note the meeting was a make or break in that video!


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