Oil price drops as Mexican stand-off threatens deal

Oil price drops as Mexican stand-off threatens deal led by Russia and Saudi Arabia

Oil prices dropped despite Russia and Saudi Arabia edging closer to completing a landmark deal to cut global production.

The pair were part of a coalition of nations that agreed on Thursday to reduce output by 10m barrels a day in an attempt to stabilise prices, after crude dived to 18-year lows.

But the deal came close to collapse when Mexico initially refused to sign up to the pact.

Mexico refused to sign up to the pact agreed by a coalition of nations to reduce crude oil output by 10m barrels a day

Last night it said it had struck an agreement with President Donald Trump, under which the US would cut extra production on Mexico’s behalf.

The terms of the wider oil deal mean it hinges on getting support from Mexico – and any separate negotiations will need to get signed off from the wider group, which is known as Opec+.

But prices fell yesterday by 4 per cent to $32 a barrel yesterday as traders worried the cuts wouldn’t be enough to offset the huge plunge in demand triggered by the coronavirus travel restrictions.