Oil prices came under renewed pressure on Wednesday following a historic two-day price plunge below zero, as markets struggle with an enormous glut amid the coronavirus outbreak.Mongolia, which spends more than 10 percent of its export revenue on fuel import, is likely to benefit from the trade with Russia if oil prices continue to plummet. Fuel accounts for 54.1 percent of the country’s import products from its northern neighbor, one of the world’s biggest oil producers. Brent futures, the benchmark for Europe in London, ended April 20 down sharply but still above USD 25 a barrel. The price of oil, which is referred to as black gold, is expected to drop further. Expectations are that production will fall by 1.7-2.0 million barrel per day by the end of 2020. It remains to be seen if the pace of the production fall will enough to stem the collapse in price. OPEC and its allies recently announced a record production cut of 9.7 million barrels per day starting May, even though the announcement has failed to excite the oil market.Moreover, the plunge in oil has dragged down stocks globally, with Asian equities slipping broadly on Wednesday. Japan’s Nikkei was down 0.77 percent while South Korea’s Kospi lost 1.4 percent.

Published Date:2020-04-23