Global Oil Producers Face Brutal Reckoning After Epic OPEC+ Fail - Bloomberg:
The alliance between Saudi Arabia and Russia was the only thing that kept the world oil market from tumbling into the abyss. Now its collapse threatens to plunge the industry into a generation-defining freefall with few precedents in modern history.
OPEC+ ministers left a fractious meeting in Vienna Friday afternoon with no deal to continue restraining output, raising the specter of a price war just as the coronavirus triggers a drop in demand that could end up the deepest since the 1980s.
“This is going to get nasty,” said Doug King, a hedge fund investor who co-founded the Merchant Commodity Fund. “OPEC+ is going to pump more, and the world is facing a demand shock. $30 oil is possible.”
The market reaction Friday was as vicious as it was swift. Brent crude, a global benchmark, fell 9.4%, the most since the global financial crisis. The spiral may not be over. Previous collapses in cooperation between OPEC nations since 1960 have triggered punishing slumps that shaped the industry for years.
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