Opec+ deal failure sends oil spiraling
Brent price falls from $45/bl to $25/bl in early trade, before partial recovery to $36/bl at 10am, as production surge threatened amid weak demand
Global oil markets were sent into turmoil on Sunday off the back of the Opec+ group’s failure to agree a production reduction target. It signals an end to the post-2016 policy of protecting price at the expense of losing market share, and implies the group could produce far more than expected at a time of sharply falling demand. Poor oil demand forecasts had weakened sharply due to the spread of Covid-19, on top of an already subdued outlook. “The potential for a strong recovery remains a distant prospect,” says Niamh McBurney, head of Mena at global risk consultancy Verisk Maplecroft. “A production free-for-all has the potential to hurt vulnerable Opec producers, such as Iraq and Nigeria
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