Oil prices fell to the lowest in more than 17 years as demand plunged as a result of the pandemic and an unrelenting price war between Saudi Arabia and Russia showed no signs of easing.
Brent crude prices hit $23.03 a barrel on Monday morning during Asia hours. The price was the lowest level since Nov. 15, 2002. It has since clawed back some losses following that record decline. But, it was last still 5.86% lower at $23.47 a barrel.
According to CNBC, U.S. West Texas Intermediate (WTI) crude futures briefly dipped below $20 per barrel to $19.90 . It was their lowest level since March 20, when they fell as low as $19.50. WTI was last 4.51% lower at $20.54 per barrel.
Rodrigo Catril, National Australia Bank, wrote in a Monday note. He wrote, “Russia and Saudi Arabia show no signs of compromising in their standoff over oil supply.”
Those declines come as Saudi Arabia signaled no breakthrough in the oil price war with Russia. On Friday, the two countries were still at a stalemate, with Saudi Arabia saying it was not in talks with Russia to stabilize oil markets despite Washington stepping in to pressure both sides to end the price war.
In early March, OPEC and non-OPEC allies, sometimes referred to as OPEC+, failed to agree on the terms of deeper supply cuts.
The fallout between OPEC kingpin Saudi Arabia and non-OPEC leader Russia has kickstarted an oil price war. OPEC recommended additional production cuts of 1.5 million bpd starting in April and extending until the end of the year, but OPEC-ally Russia rejected the additional cuts.
Saudi Arabia has signaled its intent to flood the market with crude, announcing massive discounts to its official selling prices for April, Reuters reported.
