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posted by martyb on Monday March 09 2020, @06:11PM   Printer-friendly
from the Just-like-the-good-old-days dept.

OPEC tried to keep prices high by cutting output but Russia instead started a price war which could see petrol drop to AU$1. With Saudi Arabia and Russia battling it out for market share to get past the US it could be consumers who come out on top. This change could affect many markets from agriculture to shipping having impacts across the world.

Petrol prices in Australia are expected to drop — possibly as low as $1 a litre — after Saudi Arabia started a price war with Russia on Monday.

[...] Prices are falling as Saudi Arabia, Russia and other oil-producing countries argue about how much to cut production in order to prop up prices.

The Organisation of the Petroleum Exporting Countries (OPEC) suggested cutting back oil production to stabilise falling prices but Russia, the world's second-largest producer, did not seem to be on board.

It led to Saudi Arabia, the world's biggest oil exporter, slashing its official selling prices and pledging to release more supply onto the market in an attempt to punish Russia.

The price war saw prices for brent crude, which is the international standard, fall by 25.3 per cent to $33.83 per barrel, and the benchmark US crude drop by 26.1 per cent to $30.49.

It's the biggest price fall for oil since 1991.

Also, according to CNBC Oil Nosedives as Saudi Arabia and Russia set off 'scorched Earth' Price war:

Oil prices fell through the floor in early trading Monday, tanking as much as 30% after Saudi Arabia slashed its crude prices for buyers. The kingdom is reportedly preparing to open the taps in an apparent retaliation for Russia's unwillingness to cut its own output.

"This has turned into a scorched Earth approach by Saudi Arabia, in particular, to deal with the problem of chronic overproduction," John Kilduff, founding partner of Again Capital, told CNBC. International benchmark Brent crude was trading at $33.79 a barrel — down almost 50% year to date — at 10:45 a.m. Singapore time, with West Texas Intermediate at $30.72.

[...] Experts are now calling dramatically lower crude prices as major OPEC and non-OPEC producers ready for an all-out price war after failing to reach an output cut agreement Friday, in a sudden U-turn from previous attempts to support the oil market as the new coronavirus hammers global demand.

[...] The comment came as oil prices are down 48% for the year and two days after Saudi Arabia announced massive discounts to its official selling prices for April, between $6 to $8 lower per barrel across all regions. Plunging price forecasts are also coming amid reports of a possible increase in production by the OPEC kingpin from its current 9.7 million barrels per day (bpd) to as many as two million bpd more.

With previously agreed OPEC+ production cuts expiring at the end of March, Saudi Arabia can theoretically pump as much as it wants — up to its capacity of 12.5 million bpd. And Russian Energy Minister Alexander Novak said Friday that essentially the wheels come off next month: "As from 1 April we are starting to work without minding the quotas or reductions which were in place earlier," he told reporters at the OPEC+ meeting in Vienna, adding, "but this does not mean that each country would not monitor and analyze market developments."


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  • (Score: 2, Informative) by Anonymous Coward on Monday March 09 2020, @06:35PM (8 children)

    by Anonymous Coward on Monday March 09 2020, @06:35PM (#968585)

    AU $1 per liter as a shocking new low...

    Meanwhile, 87 octane in Florida runs US$2.20 per gallon ...

    I am assuming the petrol sold in Australia is roughly equivalent to the 87 octane sold in Florida.

    Taking into account the current spot rate of 1.52 AUD / USD, those prices differ by about 10%. Given that where I live fuel prices at the pump can vary by 10% or more from one town to the next, or even at different times within a single day, those seem like very similar prices even without considering the macro-economic effects of the US being a net oil exporter while Australia is most definitely not.

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  • (Score: 3, Informative) by The Mighty Buzzard on Monday March 09 2020, @07:20PM (4 children)

    Right but we're talking a rather unusual new low as opposed to gas prices that have hung in that ten percent either side range for several years here in the US.

    --
    My rights don't end where your fear begins.
    • (Score: 0, Informative) by Ethanol-fueled on Monday March 09 2020, @09:59PM (3 children)

      by Ethanol-fueled (2792) on Monday March 09 2020, @09:59PM (#968715) Homepage

      They're trying to ratfuck our domestic frackers along with the Russkies.

      Meanwhile, gas in California will stay at 4 bucks a gallon no matter what because, oh, what excuse will they use this year? Will we have another "refinery down for maintenance" or will they wait until the switchover to "winter blend" to answer? It must be because California is so environmentally progressive they have to pay the surcharge for unicorn rainbow gas.

      • (Score: 1) by fustakrakich on Tuesday March 10 2020, @01:25AM

        by fustakrakich (6150) on Tuesday March 10 2020, @01:25AM (#968819) Journal

        They're trying to ratfuck our domestic frackers along with the Russkies.

        Or they're just cashing in while the shit is still worth a dime. The petrol and the dollar are going up in smoke.

        --
        La politica e i criminali sono la stessa cosa..
      • (Score: 2) by dry on Tuesday March 10 2020, @02:09AM

        by dry (223) on Tuesday March 10 2020, @02:09AM (#968841) Journal

        It's the same here in BC except all we can dream off is gas dropping to $4 a gallon. Yesterday I paid more then I was when oil was $150 a barrel. They blame taxes but the next town over has 19 cents a litre higher taxes and cheaper gas. The joy of having no competition and I'm sure the refinery need maintenance again.

      • (Score: 0) by Anonymous Coward on Tuesday March 10 2020, @02:47AM

        by Anonymous Coward on Tuesday March 10 2020, @02:47AM (#968863)

        ^ that ratfucker is one to listen to regarding rat fucking

  • (Score: 2) by fido_dogstoyevsky on Monday March 09 2020, @10:07PM (1 child)

    by fido_dogstoyevsky (131) <axehandleNO@SPAMgmail.com> on Monday March 09 2020, @10:07PM (#968724)

    ...I am assuming the petrol sold in Australia is roughly equivalent to the 87 octane sold in Florida...

    The most common is 91RON, followed by 95 which is gaining popularity. I haven't seen 87 for a long time.

    --
    It's NOT a conspiracy... it's a plot.
    • (Score: 2) by qzm on Tuesday March 10 2020, @08:13AM

      by qzm (3260) on Tuesday March 10 2020, @08:13AM (#968954)

      US is (RON+MON)/2 average, Australia in RON, 87 is better than 91...

  • (Score: 4, Informative) by coolgopher on Tuesday March 10 2020, @01:23AM

    by coolgopher (1157) on Tuesday March 10 2020, @01:23AM (#968817)

    Unleaded 91 and E10 94 are the low tier fuels here. Do note that the Australian rules for sulphur content are much laxer than most of the rest of the world, to the point we'll have issues with modern car imports not being able to run on our fuel. Successive governments have been kicking that can down the road for many years. Maybe it'll finally happen now that our entire car manufacturing industry is gone. Or maybe their inaction will lead to an unplanned uptake in EVs. That would be rather hilarious.