Oil plunges heavily, with OPEC+ in disarray

 Oil plunges heavily, with OPEC+ in disarray

Oil plunges heavily, with OPEC+ in disarray.

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Crude oil prices suffered record losses after hitting their highest level in six years with talks between OPEC and its allies ending in disarray, further increased selling pressures at the most traded commodity.

At the time of writing this report, both major oil benchmarks were down by more than 2.65%, with Brent crude trading at $74.34 and the West Texas Intermediate futures trading slightly above $73 a barrel.

The no-deal further means that hopes of energy demand/supply rebalancing are in a state of limbo with demand for energy globally recovering from the worst pandemic in humanity.

The oil cartel group led by the Saudi’s and other Middle East crude producers had earlier agreed to implement massive output cuts last year in an effort to support prices of the black liquid hydrocarbon when the viral onslaughts took their toll on the global economy at unprecedented levels.

However, such unity was broken some days ago, after the oil cartel group voted on a proposal to increase oil outputs by roughly 2 million barrels per day between next month and the end of the year in 400,000 barrels per day monthly installments with the United Arab Emirates rejecting such narrative has it wanted a higher baseline to its quota to allow for more domestic output.

Market commentators anticipate the no-deal poses systemic risks on the energy market in the long term, with reports showing Russia hasn’t been complying with OPEC’s production quotas.

Olumide Adesina

Olumide Adesina a France-born Nigerian, a Certified Investment Trader, with more than a decade of working expertise in Investment and Trading. He is also a reputable author and writer for CoinDesk and FxEmpire.

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