Palestine Economy Portal

Oil prices tumbled nearly 30 percent on Monday after Saudi Arabia lowered its official price for selling crude and set plans for a significant increase in oil production next month, this should start a price war even as the spread of the Corona Virus is eroding global demand growth.

Prices fell by about a third after Saudi Arabia's move when Russia refused to implement another major production cut proposed by OPEC to stabilize crude markets, which were affected by fears of the economic impact of the Corona virus.

By 0552 GMT, Brent crude futures fell $ 12.23, or 27 percent, to $ 33.04 a barrel, after dropping earlier to $ 31.02 a barrel, the lowest level since February 12, 2016. And Brent crude futures are on the way to record greater Daily decline since January 17, 1991.

WTI slipped $ 11.88, or 29 percent, to $ 29.40 a barrel, after touching a level of $ 27.34, which is also the lowest level since February 12, 2016. American crude is likely heading to the lowest level ever, exceeding a decrease of 33 percent in January 1991.

The disintegration of the group known as OPEC +, which includes OPEC as well as independent producers including Russia, ends cooperation that has lasted for more than three years to support the market, and to achieve price stability recently in light of the threat from the economic impact of the outbreak of the Corona virus.

Two sources told Reuters on Sunday that Saudi Arabia plans to increase production to more than ten million barrels per day in April after the end of the current agreement to curb production at the end of March.

The world's largest oil exporter is seeking to punish Russia (second largest), for not supporting the proposed production cuts last week by the Organization of the Petroleum Exporting Countries (OPEC).