SINGAPORE, March 10, 2020 (BSS/AFP) – Oil prices surged more than six
percent in Asian trade Tuesday following heavy losses a day earlier after top
exporter Saudi Arabia began a price war with Russia.
West Texas Intermediate was trading up 6.1 percent at more than $33 a
barrel while Brent crude advanced 6.6 percent to over $36 a barrel.
Prices had plunged by almost a third Monday, the biggest drop since the
1991 Gulf War, after Riyadh drove through massive price cuts in a bid to win
market share.
That came after Russia rejected calls from oil-exporting group OPEC, which
includes Saudi Arabia, for deeper output cuts to combat a coronavirus-fuelled
slump in demand.
The bust-up signals the disintegration of an alliance between OPEC and
Russia, the world’s second-biggest oil producer, which sought to control
supply to support prices.
“Investors are buckling in for a protracted and precarious battle of the
oil mega powers for world dominance,” said Stephen Innes, chief market
strategist at AxiCorp.
He said it was unclear whether the Saudi move was “a short-term strategy or
will be sustained for a prolonged period — which makes the outlook for crude
prices extraordinarily uncertain”.