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The oil market burst into a price war, with oil prices plummeting by 31%, the biggest drop since the opening of the Gulf Coast

Source: sina.com
[International News]     09 Mar 2020
The collapse of the OPEC alliance triggered a full-scale price war between Saudi Arabia and Russia, which could have a broad political economic impact, with oil prices falling by more than 31 per cent. In just a few seconds after the opening of trading in asia on monday, brent crude oil futures hit their second-largest drop in record terms, after the gulf war. As the world's benchmark oil price fe...

The collapse of the OPEC alliance triggered a full-scale price war between Saudi Arabia and Russia, which could have a broad political economic impact, with oil prices falling by more than 31 per cent.

In just a few seconds after the opening of trading in asia on monday, brent crude oil futures hit their second-largest drop in record terms, after the gulf war. As the world`s benchmark oil price fell to $31.02 a barrel, Goldman warned it could fall near $20.

A catastrophic collapse in oil prices, or a wave in the energy sector, could be felt either by giants such as exxon mobil or small shale oil companies in west texas. In addition, the budgets of oil-dependent countries such as Angola and Kazakhstan will suffer, global political patterns may be reshaped, and influence in countries such as Saudi Arabia will be undermined. As fossil fuels are more competitive than renewable sources of energy, efforts to address global climate change may be frustrated.

"It`s incredible that the market was flooded with selling as soon as it opened ," said Andy Lipow, president of Houston Energy Consulting Lipow Oil Associates LLC. "OPEC the price war for market share clearly surprised the market. "

The new coronavirus outbreak has already led to a surge in oil demand, and the future of unfettered supply has further disrupted the oil market. During the weekend, saudi arabia cut official oil prices by at least 20 years at their peak, hinting to buyers that it would increase production, a move that is no doubt aimed at sparking a "massive" supply of crude oil to the market. Russia says domestic oil companies can produce as much as they want.

A catastrophic collapse in oil prices, or a wave in the energy sector, could be felt either by giants such as exxon mobil or small shale oil companies in west texas. In addition, the budgets of oil-dependent countries such as Angola and Kazakhstan will suffer, global political patterns may be reshaped, and influence in countries such as Saudi Arabia will be undermined. As fossil fuels are more competitive than renewable sources of energy, efforts to address global climate change may be frustrated.

"It`s incredible that the market was flooded with selling as soon as it opened ," said Andy Lipow, president of Houston Energy Consulting Lipow Oil Associates LLC. "OPEC the price war for market share clearly surprised the market. "

The new coronavirus outbreak has already led to a surge in oil demand, and the future of unfettered supply has further disrupted the oil market. During the weekend, saudi arabia cut official oil prices by at least 20 years at their peak, hinting to buyers that it would increase production, a move that is no doubt aimed at sparking a "massive" supply of crude oil to the market. Russia says domestic oil companies can produce as much as they want.

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