Fear that the current crisis of lower demand and higher production drags oil prices further down.
The price of Texas intermediate oil (WTI) slumped 7.5% on Tuesday. The barrel closed at $ 24.1 due to uncertainty in the energy markets regarding the possible cut in world production to stabilize prices. In addition, the barrel of Brent, the European benchmark, stood at $ 32.1 at the end of the session. This is 2.9% less than on Monday.
Crude prices have dropped again considerably today. Additionally, investors have seen less cooperation in negotiations between Saudi Arabia and Russia. These negotiations involved cutting crude production and stabilize energy markets, hit by low demand amid the Coronavirus crisis.
The energy ministers of the countries belonging to the G20 will hold a telematic meeting this Friday. The Group of Twenty, which is chaired this year by Saudi Arabia, hopes to find a global solution to the situation in the oil market. The meeting will bring together energy ministers of the forum. It will foster dialogue and global cooperation to ensure stable energy markets and to enable a more robust global economy, the group explained.
The agency has assured that the G20 will act, along with invited countries and international and regional organizations, to alleviate the impact of the Coronavirus pandemic on energy markets.
Saudi Arabia and Russia have continued to dispute on oil
The price of oil dropped sharply in recent weeks. This is after Saudi Arabia, de facto leader of OPEC, did not reach an agreement with Russia. Specifically, on extending the deal they had with other oil-producing countries from January 2017. Besides, Saudi Arabia lowered the price of its crude to pressure Russia to accept the agreement.
The Coronavirus pandemic created a more difficult situation in the market.
Donald Trump, the President of the United States, assured that he had led to an agreement between Riyadh and Moscow for a cut in production.