Oil Drops 31% in Worst Loss Since Gulf War as Price Fight Erupts - Bloomberg:
Oil markets tumbled the most since the Gulf War in 1991 after the disintegration of the OPEC+ alliance triggered an all-out price-war among the world’s biggest producers.
In one of the most dramatic bouts of selling ever, Brent futures sunk by 31% in a matter of seconds after the open of trading in Asia on Monday after already suffering their biggest loss since the global financial crisis at the end of last week. As Brent collapsed as low as $31 a barrel, Goldman Sachs Group Inc. warned prices could drop into the $20s.
Hammered by a collapse in demand due to the coronavirus, the oil market sank deeper into chaos on the prospect of a supply free-for-all. Saudi Arabia over the weekend slashed its official prices by the most in at least 20 years and signaled to buyers it would ramp up output -- an unambiguous declaration of intent to flood the market with crude. Russia said its companies were free to pump as much as they could.
“It’s unbelievable, the market was overwhelmed by a wave of selling at the open,” said Andy Lipow, president of Houston energy consultancy Lipow Oil Associates LLC. “OPEC+ has clearly surprised the market by engaging in a price war to gain market share.”
Oil markets tumbled the most since the Gulf War in 1991 after the disintegration of the OPEC+ alliance triggered an all-out price-war among the world’s biggest producers.
In one of the most dramatic bouts of selling ever, Brent futures sunk by 31% in a matter of seconds after the open of trading in Asia on Monday after already suffering their biggest loss since the global financial crisis at the end of last week. As Brent collapsed as low as $31 a barrel, Goldman Sachs Group Inc. warned prices could drop into the $20s.
Hammered by a collapse in demand due to the coronavirus, the oil market sank deeper into chaos on the prospect of a supply free-for-all. Saudi Arabia over the weekend slashed its official prices by the most in at least 20 years and signaled to buyers it would ramp up output -- an unambiguous declaration of intent to flood the market with crude. Russia said its companies were free to pump as much as they could.
“It’s unbelievable, the market was overwhelmed by a wave of selling at the open,” said Andy Lipow, president of Houston energy consultancy Lipow Oil Associates LLC. “OPEC+ has clearly surprised the market by engaging in a price war to gain market share.”
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