Oil sinks to 12 month low of $50 per barrel; eyes fixed on G20 summit for correction

Last Updated: Thu, Nov 29, 2018 19:00 hrs

While major crude importing countries such as India and China may heave a sigh of relief watching Crude oil slipping to a 12-month low of $50 per barrel, oil producing countries such as Russia and the Opec could meet around the sidelines of the G20 summit.

Bloomberg reported that Future transactions tumbled by 1.8% in New York to $49.41 per barrel. This is the lowest since early October 2017.

There are fears that OPEC (Organization of the Petroleum Exporting Countries) may do little to control this sudden slippage. Last week there were talks that OPEC could act decisively and introduce supply-cuts in order to control the price. However the OPEC is yet to implement a supply-cut.

The G20 Summit starts on Friday, and will be hosted in Argentina. Analysts believe that Russian President Vladimir Putin and Saudi Arabia's Mohammad Bin Salman could hold talks around the sidelines of the summit in Argentina.

The meeting is speculated to involve talks on pricing as well as supply-cuts.

Putin although has been reported as "fine" with a price of $60 considering a weaker Ruble, but there could be further price drops by the time the meeting completes.

Saudi Arabia, analysts say is also under pressure post the killing of journalist Jamal Khashoggi, and hence may not want invite attention from US President Donald Trump. Meanwhile, US President Trump two weeks ago had asked oil producing countries to refrain from production cuts.

Amid rising supply, and growth in stockpiles there is an eerie feeling that crude prices could drop further. This could perhaps bring a cheer to policymakers in India as well as France (the rise in crude prices caused a protest), but not to oil producing countries.