New drop in oil prices

SARAJEVO, (Patria) - Oil prices fell on Monday on international markets towards 33 USD after Saudi Arabia and Russia postponed a meeting that was supposed to discuss production cuts due to the coronavirus pandemic.

On the London market, the price of a barrel fell by 81 cents compared to the previous close, to 33.3 USD. On the American market, a barrel was traded at a price 65 cents lower, at 27.69 USD, reports SEEbiz.

Traders are closely monitoring news about negotiations between leading producers on significant supply restrictions to adapt to the collapsed demand due to the coronavirus pandemic.

US President Donald Trump announced last week that he had mediated an agreement that could result in Russia and Saudi Arabia reducing production by ten to 15 million barrels per day, which represents ten to 15 percent of total global supply.

Saudi Arabia requested an urgent meeting of the Organization of the Petroleum Exporting Countries (OPEC) and independent producers to reach a fair agreement to stabilize oil markets. The meeting was supposed to be held on Monday but was postponed to Thursday.

Kremlin spokesman Dmitry Peskov said that Moscow is ready for coordination with other exporting countries to help stabilize the market. He also added that the expanded OPEC meeting was postponed for technical reasons.

Market sentiment is somewhat supported by Saudi Arabia's move to postpone the announcement of the official selling price of crude oil until Friday, in anticipation of the outcome of the OPEC+ meeting.

Traders were alarmed by the announcement of Chinese health authorities that 78 new asymptomatic cases of coronavirus infection were discovered on Sunday, compared to 47 newly discovered the day before.

These are cases where the virus is transmitted by people without any symptoms. Such transmission is currently a major concern for Chinese authorities, who have used unprecedented measures to significantly reduce the total number of infected people, Reuters interprets.

OPEC announced on its website that the price of a barrel of the reference basket of oil from its members on Friday was 23.01 USD, which means it increased by 4.11 USD compared to the previous trading day.