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Saudi Arabia’s decision to slash oil prices and boost output triggered the largest single day drop in oil prices since the 1990 Gulf War and economists at TD Securities are expecting an oil flood in the market.

Key quotes

“WTI crude is down more than 20% to $33/bbl, and follows on a 10% decline on Friday.” 

“The inability for Saudi Arabia and Russia to come to an agreement at OPEC talks held last week (Saudi Arabia wanting cuts, Russia pushing back on cuts) has effectively put an end to the co-operation between these two countries that had supported oil prices since 2016.”

“It is speculated Saudi Arabia may raise output above 10m barrels a day to as high as 12m barrels from next month with the high likelihood the Russians will flood the market with oil as well.”