Oil Plunges Below $50 as Putin Says Current Price Levels “Fine”

Investing.com – Oil prices underwent a sharp selloff on Thursday with U.S. crude plummeting below $50 for the first time in more than a year as Russian President Vladmir Putin indicated that he is comfortable with current prices, casting doubt on OPEC’s ability to move ahead with significant production cuts.

New York-traded fell 47 cents, or 0.93%, at $49.82 a barrel by 4:45 AM ET (9:45 GMT). That was its lowest level since Oct. 9, 2017.

Meanwhile, , the benchmark for oil prices outside the U.S., traded down 74 cents, or 1.25%, to $58.35, after hitting its lowest level since Oct. 24, 2017.

Putin reportedly said that prices of around $60 per barrel were “absolutely fine” as the Russian budget would be balanced at $40.

Saudi Arabia has been pushing OPEC and its non-OPEC allies led by Russia to agree to reduce production given the more than 30% decline in prices since last October.

Analysts believe that the group will announce a reduction of 1.1 million barrels per day when they meet in Vienna on Dec. 6-7.

With the U.S. and Saudi Arabia producing at record levels and rising inventories in the U.S., investors have been concerned that OPEC will be unable to counteract increasing supply.

Traders will keep an eye on this weekend’s G20 summit where Putin is expected to meet on the sidelines with Saudi Arabia’s Crown Prince to discuss plans for output.

“We are now in contact with OPEC and if needed, we will continue this joint work,” Putin said referring to the current agreement to help stabilize markets.

In other energy trading, dropped 0.74% to $1.3659 a gallon by 4:51 AM ET (9:51 GMT), while lost 0.70% to $1.8223 a gallon.

Lastly, traded down 1.87% to $4.611 per million British thermal units

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