Oil prices dropped on Monday after the Saudis and the Russians postponed a meeting to discuss potential oil production cuts.
Any output cut deal, at this time, could go a long way in helping to reduce the oil glut that has been witnessed since the Coronavirus pandemic weakened global demands.
Focus on oil prices: Brent Crude had dropped by more than $3 when the Asian trading session opened early Monday morning. However, it regained some grounds based on the optimism that OPEC and Russia were about to reach an output cut deal. Unfortunately, the meeting never held.
As of 9.15 am Nigerian time, Brent crude was down by 3.2%, trading at $33.01 per barrel. U.S. crude was also down by 3%, trading at $27.50 per barrel.
What we know: OPEC and its allies, a group also known as OPEC+, is now expected to meet on the 9th of April 2020 to discuss oil production cuts.
OPEC+ is currently working on a deal to reduce crude oil production by about 10% of global oil supply, or 10 million barrels per day. OPEC members believe this will be a significant global effort.
In more good news, Saudi Arabia recently boosted the hopes of oil traders when it decided to delay until the end of the week, the release of its official crude oil selling prices. The new release date will now coincide with the outcome of the OPEC+ meeting.
Meanwhile, America’s Donald Trump recently stated that tarrifs would be imposed on crude imports, if he ever felt the need to protect the U.S. energy industry from the oil price slump that caused by the price war between Saudi Arabia and Russia.
Last week records show rig counts in the United States fell by 62, marking the biggest weekly plunge in 5 years. U.S. energy companies have recently been reducing their spending on new exploration due to a COVID-19 pandemic, related drop in economic activity, and crude oil demand.