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Oil down about 20% after Saudi price cuts

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Oil plunged about 20 per cent on Monday after top exporter Saudi Arabia made deep price cuts following a failure by Opec and its allies to strike a deal to support energy markets.

[SINGAPORE] Oil plunged about 20 per cent on Monday after top exporter Saudi Arabia made deep price cuts following a failure by Opec and its allies to strike a deal to support energy markets.

The two main contracts were both down about 20 per cent in morning Asian trade, with West Texas Intermediate sliding to around US$32 a barrel and Brent crude to some US$36 a barrel.

Bloomberg News reported on Sunday that Saudi Arabia had begun an all-out oil war after making the biggest cut in its oil prices in the last 20 years.

The Gulf powerhouse cut its price for April delivery by US$4-6 a barrel to Asia and US$7 to the United States, with Aramco selling its Arabian Light at an unprecedented US$10.25 a barrel less than Brent to Europe, Bloomberg said.

The Saudi cuts were in response to a failure by Opec and its allies to clinch a deal on production cuts.

The Opec+ meeting was expected to agree to deeper cuts of 1.5 million barrels per day to counter the effects of the novel coronavirus, but Moscow refused to tighten supply.

AFP