FX Markets oil OPEC

Oil Dives 30% In Jaw-Dropping Move Following Saudi Price War Declaration

Not a typo.

As expected, oil plunged to start the new week, after Saudi Arabia effectively declared a price war on Saturday with deep, across-the-board OSP cuts aimed at punishing Russia for Moscow's refusal to acquiesce to production cuts in Vienna. The market is now staring down both an acute demand shock from the containment measures associated with the global fight to stop the spread of the coronavirus, and a supply shock. Riyadh is reportedly preparing to ramp production starting next month, when the existing OPEC+ deal expires. On Sunday, Mideast shares plunged the most since the financial crisis and Aramco dove 9%, falling below its IPO price for the first time. Oil's opening drop was dramatic, to say the least. Brent fell more than 31%, and WTI dropped to $30. It was the biggest one-day decline since January 17, 1991. This is made all the more incredible as it comes on the heels of Friday's 10% drop. “We believe the OPEC and Russia oil price war unequivocally started this weekend”, Goldman said Sunday. “The prognosis for the oil market is even more dire than in November 2014, when such a price war last started, as it comes to a head with the significant collapse in oil de
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9 comments on “Oil Dives 30% In Jaw-Dropping Move Following Saudi Price War Declaration

  1. Anymouse says:

    Sounds like time to buy refiners and wholesalers, since I’ll never see it at the pump.

  2. Dana says:

    Everybody’s goin’ away
    Said they’re movin’ to LA
    There’s not a soul I know around
    Everybody’s leavin’ town
    Some caught a freight, some caught a plane
    Find the sunshine, leave the rain
    They said this town’s a waste of time
    I guess they’re right, it’s wastin’ mine
    Some gotta win, some gotta lose
    OIL PATCH WORKER’s got the blues

  3. mfn says:

    Tomorrow is going to be very, very ugly.

  4. Ria says:

    Dow futures down 1000+, circuit breakers look likely at some point! Cannot wait to hear kudlow!

  5. Uni102 says:

    I need to get a little more panicked about this. It seems that the Russians want to teach US shale producers a lesson, regardless of whether the Saudis want to play ball. So the Saudis want to teach the Russians that the Saudis can absorb more pain than the Russians. Aren’t the Saudis right? All wars are costly. But won’t it become apparent that the Saudis have the upper hand? And when that happens, won’t the Russians agree to a new deal? The price war might go on forever, but I think it is more likely a question of when it will end. But by the end of the week, the markets may price it as a permanent condition.

    • mfn says:

      Best outcome? Peak oil. Ridiculous that the world has made itself hostage to these thugs and authoritarians. The planet is on fire and the only thing these idiots are interested in is making money and playing games. Time to throw the bums out. Trump, Putin, the Sauds, ExxonMobil, BP, Royal Dutch Shell, Total, Eni, Pemex, etc. A plague on their houses.

  6. George says:

    sounds like the little boy who cried wolf wasn’t kidding…….LOL

  7. monkfelonious says:

    I want to know where and to whom I send my routing info to get my anticipated helicopter money. I didn’t get any the last two times. I really do need a new refrigerator, the Kelvinator doesn’t make ice any more.

    • lynn Smith says:

      Actually helicopter money is a good idea. Essentially, we need to pay people to stay home, take care of the kids so the schools can close. $600, like Bush did in ’08, would be a great place to start.

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