Oil prices are taking it in the teeth on Friday as crude oil dove more than 10% to multi-year lows, as OPEC’s allies denied additional production cuts proposed by OPEC on Thursday.
Down over $4.50 a barrel, West Texas Intermediate crude dropped approached $41, as stock markets continue to be roiled by the coronavirus. Oil plummeted to its lowest level since Aug. 2016. It was WTI’s worst day since Nov. 28, 2014. Earlier in the session, WTI traded down as much as $41.11 per barrel.
Meanwhile, the United States Oil Fund LP (USO) is also following suit, with the ETF down nearly 10.5%, while leveraged fund, VelocityShares 3x Long Crude ETN (UWT) is down a staggering 31%.
On Thursday, OPEC suggested additional production cuts of 1.5 million barrels per day from the beginning of next month until the end of the year. The 14-member group scheduled a meeting on June 9 to review the policy. The meeting between OPEC and its allies, known as OPEC+, finished with no deal on additional production cuts, however.
OPEC ministers had claimed on Thursday that the coronavirus outbreak generated an “unprecedented situation” that necessitated action, as measures to stop the virus spreading hampers global economic activity and oil demand.
Russian Energy Minister Alexander Novak said to reporters exiting the meetings in Vienna on Friday that it signified that members could now pump what as they pleased starting April 1.