Price of Brent crude oil fell to as low as $45 per barrel on Friday as OPEC and non-OPEC countries failed to reach an agreement to make deeper cuts into their production levels.
The international benchmark plummeted to $45.29 per barrel at 1630 GMT on Friday for a 9.4% loss. American benchmark West Texas Intermediate (WTI) hit as low as $41.77 a barrel at the same time, posting a 9% decline.
Both benchmarks showed some gains in following hours as Brent climbed to $46.11 per barrel at 1915 GMT and WTI rose to $42.30 a barrel.
The group dubbed as OPEC+ failed Friday to reach a deal to make additional cuts into its output levels in order to mitigate the adverse impact of coronavirus, which causes weak global economic outlook and low oil demand around the world, thus creating a risk for an increase in the glut of oil supply in the market this year.
In addition to more production curbs, it is still unknown whether OPEC+ would extend its output cut of 1.7 million bpd of OPEC+ beyond the end of March 2020, and whether Saudi Arabia would continue its voluntary cut of 400,000 bpd after the end of the third quarter.
If both cuts would not be rolled over, this could create an additional oil supply of 2.1 million bpd from the second quarter of 2020 onwards and continue to keep the downward pressure on oil prices.
By Ovunc Kutlu