Oil prices fell as much as 5% late last week following news of lower-than-expected supply cuts by OPEC and its allies.
The Energy Minister of OPEC’s de facto leader, Saudi Arabia, in a media conference before the meeting said that OPEC and its allies including Russia would try to work out a deal by Friday to help arrest the near 30% slide in oil prices since October. Further, he added that a cut of 1 million barrels should be sufficient enough to stop the fall.
With analyst’s expectations of 1.3 million fewer barrels per day from production, the news of only a 1 million product cut hit the market hard. Oil prices dropped 4.7%, renewing fears that the cartel is struggling to respond to a supply glut.