Oil plunged nearly 30% in a chaotic market opening, with main crude benchmarks Brent and WTI both trading below $35 a barrel amid fears of an all-out price war following the collapse of an output cut deal between Russian and OPEC.
Asian markets opened with a massive gap on Monday, with Brent falling nearly 30 percent to $31.38 per barrel within seconds, while WTI dipped below $28 – the lowest since 2016 – before bouncing back slightly.
On Saturday, Saudi Arabia announced a stunning discount of $6 to $8 per barrel to its customers in Asia, Europe, and the US – and said it would boost oil production despite the global economic slowdown and crude demand drop.
The sudden move was seen as a sign of an all-out oil price war, after a supply cut deal between Russia and OPEC collapsed.
Wow. Oil prices falls 30% immediately after market opens as Saudi Arabia launches oil price war. Brent crude falls to low of 31.52 a barrel. It traded at $70 as recently as January #OOTT#OPECpic.twitter.com/QJZhRNnlPg
— David Sheppard (@OilSheppard) March 8, 2020
OPEC and non-OPEC states held consultations in Vienna on Friday, but failed to reach an agreement on additional oil cuts despite concerns over the coronavirus outbreak, which created an “unprecedented situation.”
“From April 1 neither OPEC nor non-OPEC have restrictions,” Russian Energy Minister Alexander Novak told reporters, while Saudi Arabian Energy Minister Prince Abdulaziz bin Salman said: “I will keep you wondering.”
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