Oman crude benchmark plunges to $26.18/b

MUSCAT: The marker price of the Oman Crude Oil Futures Contract (DME Oman) dived to $26.18 per barrel at close on the Dubai Mercantile Exchange on Monday, down from a closing price of $30.84/b during the last session – a steep slide that mirrored sharp volatility in global crude markets unleashed by the coronavirus pandemic and the Saudi-Russia price war.

The Oman benchmark declined $4.66 per barrel during trading on Monday as other global crude benchmarks remained at multi-year lows due to the snowballing crisis. The international benchmark Brent was down 2.3 per cent at $26 per barrel in early trading, although the US benchmark, WTI, was up 1.3 per cent at nearly $23 a barrel, having fallen over 3 per cent in earlier trades.

Both benchmarks plummeted in opening trades in response to the collapse in talks to approve a trillion-dollar support package for the American economy, aggravated by a surge in virus deaths in Europe and the US over the weekend.

Coronavirus deaths soared across Europe and the United States at the weekend despite heightened restrictions, with the tally jumping to more than 14,700, according to a Johns Hopkins University tracker.

Prices fell after a trillion-dollar Senate proposal to rescue the US economy was defeated because of zero support from Democrats, and with five Republicans absent from the chamber because of virus-related quarantines.

The bill had proposed funding for American families, thousands of shuttered or suffering businesses and the nation’s critically under-equipped hospitals.

Oil markets began plunging earlier this month after top exporter Saudi Arabia launched unilateral price cuts following a failure to secure an agreement with Russia to further reduce output and support prices.

There were hopes for some action to support the market after an envoy from Texas, a top oil-producing US state, was given a rare invite to an OPEC meeting in June. But hopes for an agreement fizzled after he faced criticism for suggesting output curbs.

(From Observer Business Desk)

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