The oil market collapse has been on everyone’s lips since early this week, as crude prices slumped by over 30 percent on Monday in their biggest fall since the 1991 Gulf War. The crunch is largely being attributed to the failed OPEC summit and Russia’s firm position not to agree to proposed production cuts as well as to the raging coronavirus.
After the sharp decline in oil prices on Monday, 9 March, the oil market set about recovering the losses, with prices going slightly up (1.48 – 6.37 percent) for two consecutive days before another dip occurred on Wednesday.
According to Alexander Osin, an analyst of Russian stock market trading at the investment company “Freedom Finance”, the oil prices will succeed in recovering and return to the earlier benchmarks.
“The OPEC really sustained the prices”, the expert says, stressing that the cartel feared a repetition of the 2014-2015 scenario, when there was “a severe pressure on investors and the government, and it was Daesh* that was used as an instrument”. At the time, the price for a barrel of oil was feared would skyrocket to over $100 per barrel if Daesh were allowed to press deeper into Iraq, the second biggest oil producer in the organisation after Saudi Arabia.
This time, OPEC proposed the same cuts as back in 2016, Osin remarks, whereas Russia apparently believes that the risks are not that high and thus declined to back the initiative, he…