Oil slumps after Saudi Arabia cuts prices
Price war starts after Russia balks at making further steep output cuts proposed by Opec to stabilise marketsA VLCC oil tanker is seen at a crude oil terminal in Ningbo Zhoushan port, Zhejiang province, China. China’s efforts to curtail the coronavirus outbreak has disrupted the world’s second-largest economy and curtailed shipments to the biggest oil importer. Picture: REUTERS
Brent crude futures were down $11.31, or 25%, at $33.96 a barrel by 5.19am, after earlier dropping to $31.02, their lowest since February 12, 2016. Brent futures are on track for their biggest daily decline since January 17, 1991, at the start of the first Gulf War. The disintegration of the grouping called Opec+ — made up of Opec and other producers including Russia — ends more than three years of co-operation on supporting the market, most recently to stabilise prices under threat from the economic impact of the coronavirus outbreak.
Saudi Arabia, Russia and other major producers last battled for market share like this between 2014 and 2016 to try squeezing out production from the US, which has grown to become the world’s biggest oil producer as flows from shale oilfields doubled its output over the last decade.
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