Oil down about 20 pc after Saudi price cuts

Oil plunged about 20 per cent Monday after top exporter Saudi Arabia made deep price cuts following a failure by OPEC and its allies to strike a deal to support energy markets. The two main contracts were both down about 20 per cent in morning Asian trade, with West Texas Intermediate sliding to around USD 32 a barrel and Brent crude to some USD 36 a barrel.

Bloomberg News reported on Sunday that Saudi Arabia had begun an all-out oil war after making the biggest cut in its oil prices in the last 20 years. The Gulf powerhouse cut its price for April delivery by USD 4-6 a barrel to Asia and USD 7 to the United States, with Aramco selling its Arabian Light at an unprecedented USD 10.25 a barrel less than Brent to Europe, Bloomberg said.

The Saudi cuts were in response to a failure by OPEC and its allies to clinch a deal on production cuts. The OPEC+ meeting was expected to agree to deeper cuts of 1.5 million barrels per day to counter the effects of the novel coronavirus, but Moscow refused to tighten supply..