Oil prices plunged on Monday as the failure to strike a deal concerning output cuts among world's major oil producers triggered fears of price war.
The West Texas Intermediate for April delivery fell 10.15 U.S. dollars, or about 24.6 percent, to settle at 31.13 dollars a barrel on the New York Mercantile Exchange, while Brent crude for May delivery fell 10.91 dollars, or 24.1 percent, to close at 34.36 dollars a barrel on the London ICE Futures Exchange. Both oil benchmarks posted their worst day since 1991.
Saudi Arabia announced massive discounts to its official selling prices for April over the weekend, and is reportedly ready to raise its production above the 10 million barrel per day level.
The move came after the Organization of the Petroleum Exporting Countries (OPEC) failed to strike a deal with its allies, led by Russia, about oil production cuts last week.
The oil market risks seeing a massive oversupply also in the second quarter, especially as demand is likely to remain badly hit for some time yet due to the COVID-19 epidemic, Carsten Fritsch, energy analyst at Commerzbank Research, said in a note on Monday.
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