Opec, allies fail to reach deal on oil production cuts

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Opec, allies fail to reach deal on oil production cuts
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Petroleum prices plunge as news of 'no deal' result reaches markets. FMTNews Oil

VIENNA: Opec and its allies failed to reach a deal on oil production cuts Friday, after Moscow refused to tighten supply to counter the effects of the coronavirus outbreak, sending oil prices tumbling.

Following hours of discussions, Russian Energy Minister Alexander Novak said that the talks between Opec and Opec+ had failed to bring about a deal. Oil prices, which have already tumbled to lows not seen since mid-2017 because of the coronavirus, fell further. “We have some few knotty issues, but the norm is here to have everybody on board,” he told reporters.

The 23 producers have since early 2017 tried to support prices through production cuts, initially of the order of 1.2 million barrels per day. “The Russians can live with US$40 a barrel oil and it seems they are willing to stomach even lower prices in the short-term to see the industry consolidate,” senior market analyst Edward Moya at the online broker Oanda said.

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