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Oil's not well

Crude oil output war, demand slump drubbing prices
Good for government, not so for oil marketers

 

 

Oil prices collapsed on March 8, 2020, after Saudi Arabia announced a material increase in production to defend its market share.

 

Prices had already plunged to $45 per barrel on March 6, as Russia broke ranks with the Organization of Petroleum Exporting Countries and allies (OPEC+), following differences over a cut in production during their meeting in Vienna.

 

That triggered Saudi Arabia – OPEC’s largest oil producer - to announce a price war by offering enormous discounts of $6-8 per barrel on its April selling price. Not surprisingly, crude prices nosedived, with Brent losing as much as ~30% to $31 per barrel on March 9.

 

The roil comes at a time the Covid-19 pandemic has renewed worries of a fresh decline, in an already sagging market because of the global economic slowdown.