Oil price wars set to play havoc on financial markets with Saudi Arabia planning to increase oil output. WTI tipped for an opening plunge in the Asia open. The Asian open will have two major weekend developments in play, the spread of the coronavirus and bearish oil. Following the largest one-day decline for oil since 2014 pushed 13 stocks in the S&P 500 energy sector down by double digits, risk-off markets will likely accelerate on Monday after receiving the news that Saudi Arabia has slashed its export oil prices in what is likely to be the start of a price war aimed at Russia. Due to the failure by OPEC and Russia to come to an agreement on oil-production cuts in the wake of greatly reduced global demand as the coronavirus continued to spread, on Friday, West Texas Intermediate crude oil for April delivery plunged 10.2% to settle at $41.28 a barrel in the largest one-day decline for the most-active contract since Nov. 28, 2014. WTI fell to a low of $41.09 from the $46 handle. However, this latest news has the potential to take prices below the weekly support into 2015-2016 price ranges. With Saudi Arabia planning to increase oil output next month, well above 10m barrels a day, reported by Bloomberg citing “people familiar with the conversations, who asked not to be named to protect commercial relations”, and privately telling some market participants it could raise production much higher if needed, even going to a record of 12 million barrels a day (above the current 9.7 millions a day), the geopolitical risks alone will make for a widespread market drama. The ramifications of such an act will put the Middle East firmly back on the map when considering how Saudi Arabia’s enemy Iran will likely respond. The move is seen as an act of retaliation for Russia’s refusal on Friday to join the Organization of the Petroleum Exporting Countries in a large production cut as the coronavirus continues to slow the global economy and, with it, demand for oil. However, on the other hand, it could play out as a means to encourage Russia back to the OPEC+ negotiating table and open a path to finally agree on a compromise – for one, Russia will likely wish to protect Venezuela’s interests which will otherwise be highly impacted by the drop in oil prices, not to mention how its oil-based economy is already under pressure from American sanctions. Market impacts The price of oil (testing weekly support). Developing nations that depend on oil prices such as Brazil, Venezuela, Nigeria, Angola. Middle Esterna shares, (shares of Saudi Aramco, the Saudi national oil company, plummeted by more than 9% on Sunday, falling below its December initial public offering price of 32 riyals for the first time). Highly indebted American oil companies. American oil production and oil-producing states. FX Street FX Street FXStreet is the leading independent portal dedicated to the Foreign Exchange (Forex) market. It was launched in 2000 and the portal has always been proud of their unyielding commitment to provide objective and unbiased information, to enable their users to take better and more confident decisions. View All Post By FX Street FXStreet News share Read Next Forex Today: So much for the dollar’s safe haven status? FX Street 3 years Oil price wars set to play havoc on financial markets with Saudi Arabia planning to increase oil output. WTI tipped for an opening plunge in the Asia open. The Asian open will have two major weekend developments in play, the spread of the coronavirus and bearish oil. Following the largest one-day decline for oil since 2014 pushed 13 stocks in the S&P 500 energy sector down by double digits, risk-off markets will likely accelerate on Monday after receiving the news that Saudi Arabia has slashed its export oil prices in what is likely to be the start of a price war aimed at Russia. Due… Regulated Forex Brokers All Brokers Sponsored Brokers Broker Benefits Min Deposit Score Visit Broker 1 $100T&Cs Apply 0% Commission and No stamp DutyRegulated by US,UK & International StockCopy Successfull Traders 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 2 T&Cs Apply 9.8 Visit Site FreeBets Reviews$100Your capital is at risk. 3 Recommended Broker $100T&Cs Apply No deposit or withdrawal feesTrade major forex pairs such as EUR/USD with leverage up to 30:1 and tight spreads of 0.9 pips Low $100 minimum deposit to open a trading account 9 Visit Site FreeBets ReviewsYour capital is at risk. 4 T&Cs Apply Visit Site FreeBets ReviewsYour capital is at risk. 5 Recommended Broker $0T&Cs Apply Trade gold, silver, and platinum directly against major currenciesUp to 1:500 leverage for forex trading24/5 customer service by phone and email 9 Visit Site FreeBets ReviewsYour capital is at risk.