Crude Oil Prices fall to 17 Year Record Low as Saudi Arabia-Russia Standoff Continues
Oil prices fell to rock bottom in additional than 17 years as demand plunged as a results of the pandemic and an unrelenting price competition between Saudi Arabia and Russia showed no signs of easing.
Stocks across Asia fell after oil prices dropped to their lowest level in nearly two decades on fears that coronavirus would cause a collapse in global demand.
Brent crude prices hit $23.03 a barrel on Monday morning during Asia hours – rock bottom level since Nov. 15, 2002. It has since clawed back some losses following that record decline, but was last still 5.86% lower at $23.47 a barrel.
U.S. West Texas Intermediate (WTI) crude futures briefly dipped below $20 per barrel to $19.90 – their lowest level since March 20, once they fell as low as $19.50. WTI was last 4.51% lower at $20.54 per barrel.
Those declines come as Saudi Arabia signaled no breakthrough within the oil price competition with Russia. On Friday, the 2 countries were still at a stalemate, with Saudi Arabia saying it had been not in talks with Russia to stabilize oil markets despite Washington stepping in to pressure both sides to end the price war.
In early March, OPEC and non-OPEC allies, sometimes referred to as OPEC+, failed to agree on the terms of deeper supply cuts.
The fallout between OPEC kingpin Saudi Arabia and non-OPEC leader Russia has kickstarted an oil price competition . OPEC recommended additional production cuts of 1.5 million bpd starting in April and extending until the end of the year, but OPEC-ally Russia rejected the additional cuts.
Saudi Arabia has signaled its intent to flood the market with crude, announcing massive discounts to its official selling prices for April.
Countries have gone into lockdown due to the coronavirus pandemic, with flights all over the world canceled as airlines ground their planes, hitting economic activity and fuel demand. That has led to excess supply flooding the market also .
With 3 billion people in lockdown, global oil requirements could drop in 20%, International Energy Agency head Fatih Birol said.