The largest drop in oil prices in 30 years

US oil prices include a massive fall on Monday, 28 percent, after collapsing of talks between OPEC and Russia on managing global oil supplies, inform brokers.

A barrel of West Texas Intermediate oil supplies in April at the NYMEX New York Stock Exchange is valued at USD 29.86, at a price reduction of 27.64 percent.

Brent crude oil supplies in May at the ICE Futures Europe London Stock Exchange are valued at USD 33.31 per barrel, down 26.42%

These are the strongest drops in oil prices since the Persian Gulf War in 1991.

Last week in Vienna, a two-day ministerial meeting of oil producers from the Organization of Petroleum Exporting Countries (OPEC) and allies outside this group was held.

OPEC and Russia without agreement

Ministers from OPEC agreed to reduce gas production by 1.5 million barrels per day in response to the weakening global fuel demand due to the coronavirus epidemic. However, Russia did not agree to this.

On Sunday, Saudi Arabia, one of the largest oil producers in the world, decided to significantly reduce the prices at which it will sell oil in April.

The Saudis also intend to increase production from the current 9.7 million barrels per day to over 10 million b / d, and Saudi’s production capacity reaches 12.5 million barrels per day. In this way, the Saudis want to push some of the producers with the highest mining costs out of the market.

Something like this can have far more serious global repercussions than the US-China trade war because oil is affecting so many things in the global economy, “says Rohitesh Dhawan, director of energy, climate and resources at Eurasia Group.

Goldman Sachs analysts predict that oil prices, which started the year at around USD 66 / b, may fall quickly to USD 20 per barrel.