Opec deal fails as oil prices plunge

OIL prices plunged to their lowest level since June 2017 after leading global suppliers failed to agree on a major output cut.

As coronavirus sent world stock markets into reverse amid fears of a global recession, a proposal by Opec to reduce daily production by an extra 1.5 million barrels met with opposition from non-member Russia.

Opec is already rolling over existing cuts of 2.1 million barrels, due to expire at the end of this month, to support prices against a drop in business activity and global travel. An additional cut would reduce global supply by about 3.6 per cent.

Russia is understood to have argued it was premature to predict the impact of a coronavirus outbreak on global energy demand and said the breakdown of talks in Vienna meant cartel members could now pump what they liked starting in April.

Russian energy minister, Alexander Novak, said: “From April 1 neither Opec nor nonOpec have restrictions.”

Brent crude fell 8 per cent to about $46 per barrel and has now lost a third of its value this year, while US light crude also slid 8 per cent at $42.

A further £60billion was wiped from the value of Britain’s top companies as the FTSE 100 fell 242 points to 6462, its lowest level for more than three-and-a-half years.

Leading European markets mirrored the FTSE’s near-4 per cent fall and Wall Street was trading down 2 per cent by the UK close.

US government bond yields fell to a record low as investors scrambled to put their money into safe haven assets.

Neil Wilson, chief market analyst for Markets.com, said: “Investors seeking shelter and betting on aggressive policy cuts have driven the hottest bond rally in years, if not ever.”