Oil price slump amplifies Covid-19 effect on market volatility

The intensity of turbulence in the global financial markets deepened on Monday as the collapse in the oil price amplified the uncertainty created by the corona virus. An oil price war was precipitated by the implosion of an OPEC+ meeting which saw Russia disagreeing with Saudi Arabia to reduce oil production to stabilise the oil price. The potential effect of the corona virus on global economic growth and demand for oil has caused the oil price to retreat from $65/bbl in January to $50/bbl. Saudi Arabia’s decision to reduce the price on its oil supplies, precipitated the collapse in the oil price to $35/bbl.