(Sharecast News) - Crude oil futures are hurtling lower following Saudi Arabia's decision to slash its official selling price, marking the start of a price war after the Organisation of Petroleum Exporting Countries's failure to strike an agreement with the Russian Federation during the previous week to curb production.
As of 2240 GMT, front month Brent crude oil futures on ICE were falling 25.33% to $36.12 a barrel, alongside a 24.45% drop in West Texas Intermediate to $33.17 a barrel.
In parallel, futures on the S&P 500 were 128.75 points lower to 2,835.25, while those for the FTSE-100 were off by 244.50 points at 6,463.50.
Just after Asian trading began, Brent hit $31.02 a barrel - registering its largest fall since the start of US bombing during the first Gulf war in January 1999 - and WTI could be seen at $30.
On 6 March, Russia had agreed to extend existng oil production curbs throgh June but balked at plans for a combined reduction alongside OPEC and Kahazkstan of a further 1.5m barrels a day, leading to the oil cartel's decision to remove limits on its own output.
According to Bloomberg, which cited people familiar with the conversations, Saudi state oil giant, Aramco, had privately told certain market participants that it was set to up production to well over 10.0m barrels a day next month, possibily to as high as 12.0m b/d.
Analysts at Goldman Sachs reportedly warned prices could fall into the $20s.
Tullow Oil (TLW)
BP (BP.)9 May 2024 15:51