Global crude oil prices are still on the edge ahead of the OPEC meeting that was scheduled to take place on April 9. Oil prices dived last month following a disagreement regarding cutting of production as coronavirus pandemic continues to suppress global demand.
Oil prices are still volatile
The two countries have been in oil price wars since March 6th with prices falling to new lows but since April 2, the prices have surged around 40% on optimism that the two sides will reach a compromise on the standoff. There have been concerns that the current lockdowns across the globe because COVID-19 could make available crude oil in surplus thus pressuring oil prices.
At the beginning of this week, Brent crude dropped 12% but later recovered the lost ground while US-Traded oil fell 10% before mounting a recovery to establish at 3.5% lower. Currently, crude oil is holding at $27.36 per barrel resistance and $26.56 per barrel support level. The drop last month was the worst in two decades.
Russia and Saudi Arabia to hold talks
Last week Russian President, Vladimir Putin and Alexander Novak the Minister of Energy called for oil producers to cut output and also urged OPEC members to take part. Putin said that there was a possibility of cutting production by up to 10 million barrels/day. However, this positive sentiment did not last for long after another rift emerged between Moscow and Riyadh.
The meeting that was to happen this Monday was pushed to Thursday and for now, oil prices continue to experience volatility. Both countries are blaming each other for the fall in crude oil prices. Because of the volatility experienced Brent might likely plunge further on Thursday is the meeting doesn’t arrive at a viable policy. This will be very important as the spread of COVID-19 and measures taken to combat the spread of the virus continue to impact global demand.