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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: 1) by fustakrakich on Monday March 09 2020, @09:02PM

    by fustakrakich (6150) on Monday March 09 2020, @09:02PM (#968685) Journal

    Anyone on the fence will probably go ahead and buy that big motorhome

    Another adventure for Priscilla?

    --
    La politica e i criminali sono la stessa cosa..