Shine a light on nurses & midwives
This year’s World Health Day (April 7) comes in the midst of a health crisis in the form of the novel ...
Oil prices plunged around 25 per cent on Monday, heading towards their biggest daily loss since 1991 after Saudi Arabia slashed prices and set plans for a big increase in crude production in April.
Prices fell as much as 31 per cent following the Saudi move to start a price war after Russia was unwilling to cut output further as proposed by the OPEC to stabilize oil markets hit by worries over the global spread of the coronavirus.
Brent crude futures were down $11.31, or 25 per cent, at $33.96 a barrel by 0319 GMT, after earlier dropping to $31.02, their lowest since February 12, 2016. Brent futures are on track for their biggest daily decline since January 17, 1991, at the start of the first Gulf War.
US West Texas Intermediate (WTI) crude fell by $10.73, or 26 per cent, to $30.55 a barrel, after touching $30, its lowest since February 22, 2016. The US benchmark is also heading for its biggest falling since January 1991.
“I think all forecasts are out the window,” said Jonathan Barratt, chief investment officer at Probis Securities in Sydney. “It seems like a race to the bottom to secure order(s).”
The disintegration of the grouping called OPEC+ - made up of OPEC plus other producers including Russia - ends more than three years of cooperation on supporting the market, most recently to stabilize prices under threat from the economic impact of the coronavirus outbreak.
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.
Punishing Russia
Saudi Arabia, the world's biggest oil exporter, is attempting to punish Russia, the world's second-largest producer, for baulking on Friday at production cuts proposed by the Organisation of the Petroleum Exporting Countries (OPEC).
OPEC and other producers supported the cuts to stabilize falling prices caused by the economic fallout from the coronavirus outbreak.
Saudi Arabia plans to boost crude output above 10 million barrels per day (bpd) in April after the current supply deal between OPEC and Russia - known as OPEC+ - expires at the end of March, two sources told Reuters on Sunday.
Saudi Arabia, Russia, and other major producers last battled for market share like this between 2014 and 2016 to try to squeeze out production from the United States, now the world's biggest oil producer as flows from shale oil fields doubled the country's output during the last decade.
“Saudi Arabia and Russia are entering into an oil price war that is likely to be limited and tactical,” Eurasia Group said in a note.
“The most likely outcome of this crisis is entrenchment into a painful process that lasts several weeks or months, until prices are low enough to ... some form of compromise on resumed OPEC+ production restraint,” Eurasia said.
Saudi Arabia has opened the war by cutting its official selling prices for April for all crude grades to all destinations by between $6 to $8 a barrel.
Slump in demand
China's efforts to curtail the coronavirus outbreak has disrupted the world's second-largest economy and curtailed shipments to the largest oil importer.
The spread to other major economies such as Italy and South Korea and the burgeoning cases in the United States has increased the concerns that oil demand will slump this year.
Major banks such as Morgan Stanley and Goldman Sachs have cut their demand growth forecasts, with Morgan Stanley predicting China will have zero demand growth in 2020 while Goldman is seeing a contraction of global demand of 150,000 barrels per day.
In other markets, the dollar was down sharply against the yen, Asian stock markets were set for big falls and gold rose to the highest since 2013 as investors fled to safe havens.