Posted on 03/09/2020 10:09:09 AM PDT by Oldeconomybuyer
NEW YORK - Oil prices crashed on Monday, suffering their biggest daily rout since the 1991 Gulf War, after the collapse of an OPEC+ supply agreement that now threatens to overwhelm the world with oil, inciting panic throughout the energy sector.
After failing to come to an agreement to cut supply, Saudi Arabia and Russia over the weekend pledged instead to ramp up production, which could quickly flood global markets with oil at a time when demand has already weakened substantially.
The market’s reaction has been furious, with crude futures plunging by nearly 20%, while energy stocks collapse as shale producers frantically cut future expenditures in anticipation of a drastically different outlook than a few days ago.
Should these losses hold, it would be the biggest one-day percentage decline for both benchmarks since Jan. 17, 1991, the outset of the U.S. Gulf War, when it fell by a third.
A three-year supply pact between members of the Organization of the Petroleum Exporting Countries, which includes the group’s top producer Saudi Arabia, and Russia fell apart on Friday after Moscow refused to support deeper oil cuts to cope with the outbreak of coronavirus.
OPEC responded by removing all limits on its own production, prompting fear of a supply hike in a market already awash with crude.
Despite sliding demand for crude due to the coronavirus, Saudi Arabia plans to boost its crude output above 10 million barrels per day (bpd) in April after the current deal to curb production expires at the end of March, two sources told Reuters on Sunday. Saudi Arabia also cut its official crude selling price.
(Excerpt) Read more at reuters.com ...
What about Iran?
This could take down the Mullahs and it might be the real target for this Saudi action.
Ahhhh...time to fill up the gas tanks....
The timing of this is sure interesting.
Rush just talked about this in the first hour today.
Guess I'm getting old.
I remember when this would have been good news.
Of you can’t refine it.........
Yeah I'm sure SA and Russia can afford to give their petroleum away forever.
Sooner or later a vaccine for coronavirus is going to be found.
How soon before pump prices go down? In an oil crisis they couldn’t go up fast enough.
Saudia Arabia needs fifty dollar oil as must as our oil industry does...
Oil is the thing that keeps the economy afloat...
If you pump 8 million at 50$
You pump 12 million at 32 what have you gained???
Not much..
I am thinking the same way as you. I always thought this was good news too. It is interesting how things change over a fairly short period of time.
I will wait a couple of days then fill up my car.
That applies to new wells, but existing wells will continue to pump oil out. The marginal cost of extracting oil from already drilled wells (especially fracked wells) is way below the current market price. These aren’t the old-type stripper wells that might produce 10-50 BPD, this is a whole new animal.
We are set up very nicely for energy dominance - not just independence, but DOMINANCE in the near- to mid-term. Thank you, advanced drilling technology and President Trump.
The agreement between Russia and OPEC ended this month anyway. What is being reported is actually the failure of a future agreement.
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Russia is desperate for money. They want into European sales that the past agreement limited.
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Our domestic oil production is soaring, offering competition that OPEC has never seen.
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Our domestic producers need about $34 barrels to break even, fracking is not as cheap as it seems.
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The big losers will be Iran, Mexico, and the S Americans because they don’t have many refineries to sell finished product.
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We could well see $1 gas.
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The other driver is the dramatically lowered demand by the Chinese, they are really hurting for business and travel. So there is a glut + increased production.
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The Saudi’s and their neighbors still make money at $19 oil.
When oil prices plunge it takes weeks for the price to go down, when oil prices rise gas prices go up within the hour
I believe Iran is the real Saudi target here and not the Russians. Saudis see Iran struggling with the Corona virus, and figure this will be the final straw.
they must have plunged- our gas dropped a whole cent this week- $2.83- yippie- it’s almost affordable now- We were $2.85 all winter long- no fluctuation at all- months- now we dropped 2 whole cents this month- what am i ever gonna do with all that extra money savings?
oil prices l=plunge, gas prices take weeks to drop around here- but oil prices go up and gas prices almost beat them to the punch by rising 5 cents, 10 cents etc- immediately-
Oil's ALL they have to pay for their cradle to grave welfare. For that, they need oil to be way up over $75. What happens to the Saudi royals when the natives go unpaid and threatens to start lopping heads?
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