Russian Stocks, Global Oil Prices Slide as Coronavirus Fears Strike Markets

Russian stock indices accelerated the decline caused by fears over the coronavirus outbreak and uncertainty about oil prices during the Friday trading session on the Moscow Exchange, reported. 

The ruble-denominated RTS Index lost 5.6% and declined to 1,250.4 points, according to trading data.

The MOEX Russia Index fell 4.3% to 2,695.34 points, staying below 2,700 points for the first time since 15 October 2019.

Stocks of Aeroflot, Gazprom Neft, Sberbank, Surgutneftegaz, Mechel, NLMK and Yandex suffered the biggest decline in value. 

Meanwhile, the price of oil continues to slump amid doubts that OPEC will succeed in agreeing with ally Russia on cutting production to support prices as the virus outbreak disrupts the global economy.

The cartel is trying to convince Russia and other non-member producers to join in deep production cuts to prevent weak oil prices from falling even further.

Russia’s energy minister, Alexander Novak, entered the OPEC headquarters without answering journalist’s questions as officials prepared to take up the cartel’s proposal to cut output by 1.5 million barrels a day, of 1.5% of world production.

OPEC countries like Saudi Arabia and Iran say they need non-member allies to take 500,000 barrels of that cut on themselves.

Analysts say OPEC may struggle to keep oil prices from falling further as it remains unclear how much the turmoil in the global economy will affect the need for energy.

“There is still too much uncertainty regarding the amount of demand destruction,” analysts at research firm Petromatrix said in a note to investors.

The international benchmark for crude oil fell more than 4% to $47.89 on Friday. It had been trading over $50 in recent days, down from $69 in January before the outbreak.

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