Audio By Carbonatix
Losing more than a quarter of their value, oil prices were set on Monday for their biggest daily rout since the first Gulf War, after Saudi Arabia cut its official prices in a market already reeling from the impact of the coronavirus on global demand.
Saudi Arabia slashed its official selling prices and made plans to ramp up crude output next month after Russia balked at making a further steep output cut proposed by the Organization of Petroleum Exporting Countries to stabilize oil markets.
Brent LCOc1 crude futures were down $11.38, or 25%, at $33.89 a barrel by 0732 GMT, after earlier dropping to $31.02, their lowest since Feb. 12, 2016. Brent futures were on track for their biggest daily decline since Jan. 17, 1991, when prices dropped at the start of the first Gulf War.
U.S. West Texas Intermediate (WTI) crude CLc1 fell by $11.12, or 27%, to $30.16 a barrel, after touching $27.34, also the lowest since Feb. 12, 2016. The U.S. benchmark was potentially heading for its biggest decline on record, surpassing a 33% fall in January 1991.
“The timing of this lower price environment should be limited to a few months unless this whole virus impact on global market and consumer confidence triggers the next recession,” said Keith Barnett, senior vice president strategic analysis at ARM Energy in Houston.
The disintegration of the grouping called OPEC+ - made up of OPEC plus other producers including Russia - ends more than three years of cooperation to support the market.
Saudi Arabia plans to boost its crude output above 10 million barrels per day (bpd) in April after the current deal to curb production expires at the end of March, two sources told Reuters on Sunday.
The world’s biggest oil exporter is attempting to punish Russia, the world’s second-largest producer, for not supporting the production cuts proposed last week by OPEC.
Saudi Arabia, Russia and other major producers last battled for market share like this between 2014 and 2016 to try to squeeze out production from the United States, which has grown to become the world’s biggest oil producer as flows from shale oil fields doubled over the last decade.
“The deal was always destined to fail,” said Matt Stanley, senior broker at Starfuels in Dubai.
Latest Stories
-
Cagliari eye loan swoop for Ibrahim Sulemana amid Parma and Sassuolo interest
50 minutes -
Morocco beat Nigeria on penalties to set up AFCON final against Senegal
4 hours -
NaCCA Director-General apologises as withdrawn teacher manual sparks national outrage
4 hours -
Mane destroys Salah’s Afcon dream again – will he get another chance?
5 hours -
‘If Flick hadn’t come, I would have left Barca’ – Raphinha
5 hours -
Real Madrid stunned by second division Albacete in Copa del Rey
5 hours -
Tottenham sign Gallagher from Atletico for £35m
5 hours -
Amateur stuns world’s best Jannik Sinner to win A$1m in Melbourne
5 hours -
FBI searches home of Washington Post reporter in classified documents probe
6 hours -
Trump administration pauses immigrant visa processing for 75 countries
6 hours -
UK–Ghana crack down on immigration crime as fugitive smuggler jailed
6 hours -
Ghana’s Benjamin Arhin shines on Internacional debut with Man of the Match display
6 hours -
Stanbic Bank Ghana maintain top rank in Customer Experience Leadership in 2025 KPMG Assessment
6 hours -
Newmont-backed AI smart lab powers Kona D/A students to victory at Ghana Robotics Competition
7 hours -
Venezuelan acting president says hundreds of prisoners have been released since December
7 hours
