Oil prices have continued to fall this afternoon amid fears that proposed cuts to production will not go far enough to stabilise prices, which have been in freefall due to the coronavirus pandemic.
Benchmark Brent crude fell over five per cent to stand at $32.3, while West Texas Intermediate shed seven per cent to hit $26.4.
Producer cartel Opec is due to meet with Russia on Thursday to seek an end to a production war which has flooded the market and forced prices into decline.
Since the beginning of this year, prices have collapsed by two-thirds of their value due to the combination of the dispute and falling demand due to the coronavirus outbreak.
However, there are concerns that even the 10m to 15m barrels per day production curbs first trailed by US president Donald Trump last week will not bolster the market.
Goldman Sachs has predicted that 26m barrels per day will be struck off global demand amid the coronavirus recession.
Independent consultancy Rystad Energy’s head of oil markets Bjornar Tonhaugen said even if the group agrees to cut up to 15m barrels , “it will only be enough to scratch the surface of the more than 23m supply overhang predicted for April 2020”.
Joshua Mahony, market analyst at IG, agreed, saying: “What is clear is that any production deal would fall short of the huge slump in demand expected in the months ahead.”
According to the Financial Times, Thursday’s meeting of the wider Opec alliance will be followed by an emergency meeting of oil ministers from G20 states.
Dr Fatih Birol, chief executive of the International Energy Agency, said the meeting would be aimed at working out how to protect the world’s energy markets and stabilise the global economy.