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Brent crude oil down below $34 per barrel, first time since February 2016

Crude Oil prices have already moved sharply lower this year as the coronavirus outbreak has led to softer demand for crude. 

A potential supply glut could pressure prices further. COVID-19 and OPEC+ falling apart were not expected or priced into the market a month ago and the devastating effects of both may just be at the beginning of an unfolding economy plummet if the efforts to contain the spread of the virus are not yielding as quickly as possible.

The cost of futures for Brent crude oil with settlement in May 2020 on the ICE Exchange in London fell by 33.4% to $33.94 per barrel, according to trading data as of 01:08 Moscow Time.

International benchmark Brent crude futures also plummeted 26.4% to $33.32 per barrel. Brent futures were down more than 30% at their lows.

U.S. West Texas Intermediate crude dropped 27.62% to $29.88 per barrel as of 06:33 GMT Monday, having earlier tumbled to a low of $27.34 per barrel.

By 11:25 GMT, Brent partially won back its fall, the price of futures rose to $35.23 per barrel.

The last time the oil price was below $34 per barrel in February 2016.

The cost of the April futures contract for WTI crude oil fell by 27.1% to $ 32.48 per barrel.

Oil price is falling amid news that OPEC+ countries failed to agree on an additional reduction in oil production amid falling demand due to coronavirus.

OPEC’s failure to strike a deal with its allies regarding production cuts caused Saudi Arabia to slash its prices as it reportedly gets set to ramp up production, leading to fears of an all-out price war.

At the meeting in Vienna, OPEC proposed to further reduce production by 1.5 million barrels per day until the end of this year. However, Russia and Kazakhstan opposed this proposal. Russia, in particular, insisted on the extension of the current agreements only for the second quarter.

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