Oil markets affected by crude war
For the first time in about 28 years, oil markets fell the most since the US war in Iraq, 1991, due to a collapse in demand due to the coronavirus. Brent futures dipped by 31% after the open of trading in Asia on Monday after already suffering their biggest loss since the global financial crisis at the end of last week. Saudi Arabia over the weekend decreased its official prices by the most in at least 20 years.
“The oil-price weakness is looking likely to extend and steepen, probably in coming weeks and months, unless there is some policy coordination to bring that to an end,” opined Tim Fox, chief economist at Dubai-based lender Emirates NBD PJSC.
Traders are jittery over the prospect of a price war after 2014 when an explosion in U.S. shale production prompted OPEC to open the spigots in an attempt to suppress prices and curtail shale output.