Oil plunges over 20% after Saudi Arabia slashes prices on OPEC deal collapse

Commodities & Futures
© Reuters. FILE PHOTO: Pump jacks operate at sunset in Midland © Reuters. FILE PHOTO: Pump jacks operate at sunset in Midland

(Reuters) – Oil futures suffered their biggest daily loss since 1991 on Sunday after Saudi Arabia slashed its official selling price (OSP) and announced plans to raise crude production significantly, signaling the start of a price war.

Those moves came after Russia on Friday balked at OPEC’s proposed steep production cuts to stabilize prices hit by economic fallout from the coronavirus.

Saudi Arabia said it plans to boost crude output above 10 million barrels per day (bpd) in April after the current deal to curb production between OPEC and Russia – known as OPEC+ – expires at the end of March, two sources told Reuters on Sunday.

Saudi Arabia cut its OSP for April for all crude grades to all destinations by anywhere from $ 6 to $ 8 a barrel, sending oil into a tailspin.

Brent () futures fell $ 9.95, or 22.0%, to $ 35.32 a barrel by 6:34 p.m. EDT (2234 GMT), while U.S. West Texas Intermediate (WTI) crude () fell $ 8.99, or 21.8%, to $ 32.29.

Earlier in the session, both contracts fell to their lowest since February 2016, with Brent down to $ 31.02 per barrel and WTI at $ 30.

That puts Brent and WTI on track for their second biggest daily percentage drops in history behind declines for both in January 1991 over 30%.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Let’s block ads! (Why?)

Commodities & Futures News

Leave a Reply

Your email address will not be published. Required fields are marked *