OPEC’s Basket Oil Price Dips Below $17

The average price of oil produced by members of the Organization of Petroleum Exporting Countries (OPEC) fell to $16.87 a barrel on Wednesday. The price reflected a drop of about 25% over the previous day, when it stood at $22.61. The figure reflects what is called the OPEC basket, a weighted average price. Like other oil producing countries, the members of OPEC are struggling with a deep drop in demand due to the coronavirus crisis. Another factor in the slump is a price war between Saudi Arabia and Russia, with Riyadh having ramped up production to 12 million barrels a day after Moscow spurned a proposed cut owing to the coronavirus slump. Low oil prices mean relatively cheap gasoline for drivers, but they are also playing a major role in the huge drops in stock prices. Eyeing this, US President Donald Trump says he will reach out to both Saudi Arabia and Russia to put aside their differences, at least until the pandemic ends. Worldwide, oil prices are at a 20-year low.