The Address | Benghazi – Libya
LONDON – Oil prices fell as much as 4 per cent in volatile trading on Tuesday as planned production curbs by global producers, led by Saudi Arabia and Russia, failed to allay concerns about oversupply stoked by swelling US shale output.
Fears about weaker oil demand amid a potential slowdown in the global economy have also added to worries about how effective the supply cuts agreed earlier this month will be. The fall in oil comes amid broader pressure on global equities due to persistent worries over how the US-China trade war could hit economic growth.
“The effect of the announced production cuts after Opec’s meeting [earlier this month] has evaporated entirely,” said Carsten Fritsch at Commerzbank. “Prices are continuing to nose-dive.”
Brent crude, the international benchmark, fell as much as much as 4 per cent to as low as $57.20 a barrel in its third straight day of declines. It had trimmed some of that drop to trade down 1.7 per cent by the New York morning.
Oil price volatility – in three charts West Texas Intermediate, the US benchmark, weakened as much as 4.1 per cent to $47.84, the lowest level since September 2017, before recovering to trade down just 2.1 per cent.
Global producers have agreed to cut production by 1.2m barrels a day to halt a more than 30 per cent slide in oil prices, since hitting $86 a barrel in October. The move came in defiance of US president Donald Trump, who had called for Opec to keep output elevated and prices low.