OIL futures suffered their biggest daily loss since 1991 on Sunday after Saudi Arabia slashed its official selling price (OSP) and announced plans to raise crude production significantly, signaling the start of a price war.
Those moves came after Russia on Friday balked at OPEC's proposed steep production cuts to stabilise prices hit by economic fallout from the Covid-19 coronavirus.
Saudi Arabia said it plans to boost crude output above 10 million barrels per day (bpd) in April after the current deal to curb production between OPEC and Russia - known as OPEC+ - expires at the end of March, two sources told Reuters on Sunday.
Saudi Arabia cut its OSP for April for all crude grades to all destinations by anywhere from US$6 to US$8 a barrel, sending oil into a tailspin.
Brent futures fell US$9.95, or 22.0 per cent, to US$35.32 a barrel by 6.34pm EDT (2234 GMT), while US West Texas Intermediate (WTI) crude fell US$8.99, or 21.8 per cent, to US$32.29.
Earlier in the session, both contracts fell to their lowest since Feb 2016, with Brent down to US$31.02 per barrel and WTI at $US30.
That puts Brent and WTI on track for their second biggest daily percentage drops in history behind declines for both in Jan 1991 over 30 per cent. - Reuters
