Singapore: Oil plunged over 20 per cent on Monday after top exporter Saudi Arabia launched a price war in response to a failure by leading producers to strike a deal to support energy markets.
The two main contracts both lost about a fifth of their value in morning Asian trade, with West Texas Intermediate sliding to about USD 32 a barrel and Brent crude to about USD 36 a barrel.
Saudi Arabia launched an all-out oil war Sunday with the biggest cut in its prices in the last 20 years after a failure by cartel OPEC and its allies to clinch a deal to cut production.
A meeting of main producers was expected to agree to deeper cuts to counter the impact of the new coronavirus -- but Moscow refused to tighten supply.
In response, 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.
Jeffrey Halley, senior market analyst at OANDA, said that "Saudi Arabia seems intent on punishing Russia.
"Oil prices... will likely be capped over the next few months as coronavirus stalls economic growth, and Saudi Arabia opens the pumps and offers huge discounts on its crude grades."
Global markets had already fallen heavily in recent weeks due to fears about the coronavirus, which has killed thousands and has spread around the world since emerging in China late last year.
Asian stock markets also plunged following concerns over tumbling oil prices hitting an environment already weakened by the financial effects of the global virus outbreak.
