Crude Oil Price Plunges 6% As Economic Slowdown Fears Grip Market

Representatives of Organization of Arab Petroleum Exporting Countries in Kuwait

Representatives of Organization of Arab Petroleum Exporting Countries in Kuwait

In addition, OPEC and allies led by Russian Federation agreed earlier this month to cut oil production by 1.2 million barrels per day from January.

Oil fell towards $45 a barrel as worries over rising USA supplies and the global economy overshadowed signals from Opec that it may extend or even deepen its pledged output curbs. Yet, crude's descent has deepened as investors doubt the reductions will be sufficient to dent supply levels, with USA crude output still above 11 million barrels a day on a weekly basis.

Shares of airliners flew up north on Wednesday, taking off smartly after crude oil prices slumped to their lowest levels in about eighteen months earlier this week.

Higher U.S. interest rates as well as U.S. The combined group plans to lower output by 1.2 million bpd next year.

"What has happened in my opinion recently is a confluence of many non-oil fundamental issues including the geopolitical issues", Saudi Arabian Energy Minister Khalid Al-Falih told reporters in Riyadh earlier.

The Emirati minister said a joint OPEC/non-OPEC monitoring committee would meet in Baku at the end of February or the beginning of March, as producers aim to return the oil market to the balance reached in the summer of 2018.

Oil consumption in emerging economies across Asia, such as China and India, which account for roughly two thirds of global oil demand, is expected to shrink due to a projected slowdown in economic growth. On Wednesday, oil prices were mixed as the US benchmark recovered from sharp losses in the previous session.

Crude is the key raw material for oil marketing companies and a major portion of operating expenses for airline firms.

Markets across asset classes have come under pressure as the United States government shutdown that began just after midnight on Saturday intensified growth concerns.

"As stocks get taken down and there is nervousness across financial markets, it's just undercutting prices here", said John Kilduff, a partner at New York-based hedge fund Again Capital. "On 18 December, a 2.4 percent fall in energy stocks contributed to an early gain in the S&P index being erased", the investment bank said in a recent article.

"US$50 is a psychological support level (for Brent)", said Margaret Yang, a market analyst for CMC Markets in Singapore.

"The planned cuts have been carefully studied, but if it doesn't work, we always have the option to hold an extraordinary OPEC meeting and we have done so in the past", Suhail Al Mazrouei, who is also OPEC president, said in Kuwait.

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