Oil Prices Freefall Despite OPEC Deal

• Oil Prices Freefall Despite OPEC Deal

Oil prices continue to freefall despite OPEC’s success at extending production cuts into 2020.

The Brent Crude oil, against which Nigerian oil is measured, declined from $66.70 a barrel on Monday to $62.42 on Wednesday.

While the US West Texas Intermediate dropped from $60.20 on Monday to $56.40 on Wednesday.

This was after OPEC+ agreed to extend production cuts until March 2020 on Monday to ease global supplies amid a slowing global economy.

In a statement released on Tuesday, the organisation said: “in view of the underlying large uncertainties and its potential implications on the global oil market.”

Russian Energy Minister, Alexander Novak, who was also in Vienna said the new agreement was to prevent major volatility in the market.

“I think it is right not to make any sudden movements now and maintain the situation as it is,” Novak told CNBC. “What is important is that we have agreed to monitor the situation. If there are any drastic deviations, then we can swiftly get together and decide on what to do,” he added.

Also, the US Energy Information Administration estimated that crude oil production for the week ended June 21 dropped again to 12.1 million bpd. Suggesting that crude oil producers are slowing down as the uncertainty surrounding the US-China trade war continues to weigh on global demand despite efforts to maintain the situation.