Saudi Arabia and Russia have decided to part ways. Let’s see what happened with Crude Oil price
Oil market crashed more than 30% after the disintegration of the OPEC+ alliance triggered a war price between Saudi Arabia and Russia. This alliance ends a cooperation between Saudi Arabia and Russia that has underpinned Oil prices since 2016.
Crude Oil prices are on downward spiral after Russia didn’t agree to the OPEC’s proposal for an additional production cut of 1.5 million barrels per day.
The Oil markets are at the worst price dip since the 1991 Gulf War as Brent prices are down to $31.02 per barrel. U.S. crude Oil Futures went down with 10.1% to $41.28 a barrel, the lowest level since August 2016 and the biggest drop in more than five years. Goldman Sachs sees Brent Crude prices averaging $30 in Q2 and Q3, with risks of falling to $20.
Most economists estimate that cheaper Oil translates into lower Gasoline prices, which act as a de-facto tax cut for consumers,
Low prices on energy are bad news for U.S. Oil and Gas firms. With the U.S. shale boom already facing numerous threats, and OPEC+ price war may be a net negative for the domestic economy.
Sources: investors.com, investing.com, livemint.com
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