WTI tanks to four-year low as Saudi Arabia launches price war
- WTI oil is falling fast on fears of an all-out Saudi-Russia oil price war.
- Saudi Arabia slashed its export oil prices over the weekend.
- The Kingdom wants to boost the oil output rather than cut it.
West Texas Intermediate (WTI) Oil opened the week on a negative note, falling as low as $30 in early Asia. That level was last seen in August 2016.
Oil price war
Saudi Arabia stunned the world over the weekend by cutting export prices by $6 to $8 per barrel for its Asian customers. The Kingdom also said it will boost production instead of cutting it to arrest the coronavirus-led slide.
The dramatic reversal in Saudi's policy is widely being referred to as retaliation to Russia's refusal to join the Organization of the Petroleum Exporting Countries (OPEC) in a large production cut.
The OPEC+ (OPEC and its allies) meeting convened last week was expected to conclude on a positive note with members agreeing to deeper cuts of 1.5 million barrels per day to counter the effects of the novel coronavirus. Moscow, however, rejected output cuts, leaving the future of Moscow-Riyadh oil cooperation in doubt, as noted by The Moscow Times.
WTI oil is currently trading at $30.58 per barrel, down more than 20 percent on the day and 32 percent on a month-to-date basis. Meanwhile, Brent is trading at $34, also the lowest since February 2016.
Oil benchmarks were already on a weak footing - prices fell by over 14% last week on coronavirus fears.
WTI technical levels
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
