Oil prices in reverse amid Opec call

29.05.2020 11:25

Oil prices tumbled again on Monday, eroding last week's gains, as Opec called for co-operation from oil-producing nations outside the cartel.

Brent crude fell 6.3% to $30.15 a barrel following a 10% rise on Friday, while US oil shed 7.1% to $29.90.

The slide came as the head of Opec called for all oil-producing nations to work together.

Abdullah al-Badri said both Opec and non-Opec oil producers needed to tackle oversupply to help prices rise.

"It is vital the market addresses the issue of the stock overhang. As you can see from previous cycles, once this overhang starts falling then prices start to rise," he told a conference in London.

Despite the ongoing refusal of Saudi Arabia, the dominant Opec member, to cut production, Mr al-Badri nevertheless blamed countries outside the cartel for the huge global oil glut.

"Yes, Opec provided some of the additional supply last year, but the majority of this has come from non-Opec countries," he said.

Opec accounts for almost 42% of the world's oil production.

Analysis: Andrew Walker, BBC Economics Correspondent

What's an oil producer to do amid tumbling prices?

Ask everybody in the business to cooperate, it seems.

If you're Opec, that means asking non-members, such as Russia to join in with curbing production.

It must be said that the prospects of any co-operation from outside Opec are weak at the best of times.

But it has got harder in the last decade.

The surge in US shale oil means it is much more difficult to manage the market without American co-operation, which would never be forthcoming.

The US government wouldn't want to work with Opec, and in any case private companies are the ones taking the decisions.

They will cut if it makes commercial sense to them and their shareholders.

(BBC)