Oil Prices Plunge as OPEC Deal Failure Triggers Price War

Oil Prices Plunge as OPEC Deal Failure Triggers Price War


Oil prices kicked off the week on a sharp gap lower as Saudi Arabia offered sharp discounts on April crude and looking forward to increasing production as a response to OPEC+ failure of reaching an agreement over production cuts last week. Oil benchmarks were sharp in red this morning, with the West Texas Intermediate crude futures tumbling to $27.34, and Brent futures plunging to $31.28.


The dollar index, which measures the greenback against a basket of major currencies, tumbled to 94.73, its lowest level since September 2018. The Coronavirus outbreak and oil price-war fears drove investors towards safety and assumption of further monetary policy easing by the Federal Reserve. US Treasury yields declined to fresh record lows. The US 10-year yields declined to 0.36%, and the 30-year yields fell to 1.235%. The CME Fed Watch tool is showing a significant probability that the Fed Funds Rate will drop to 0.25-0.50% in the March meeting. The USDJPY dived to 101.54, the lowest since November 2016, the EURUSD edged higher to $1.15, and the GBPUSD rose to $1.32.


US stock-index futures fell sharply weighed down by coronavirus fears and the latest developments in the oil market. The Dow Jones Industrial Average futures declined to 25534, the S&P500 futures fell to 2819, and Nasdaq futures dropped to 8093. In Europe, the German Dax futures sank to 10428, and the Italian FTSEMIB plummeted to 20624.


Gold prices soared to a fresh seven-year high on mounting market risks and uncertainties. The significant impact of the Coronavirus outbreak on the global economy and the sparked oil price-war fears pushed investors to safe assets. The price of a gold ounce rose to $1703, but trimmed gains as funds liquidated positions to cover for margin calls. The price of a silver ounce fell to $1656, and palladium futures descended to 2330.

Major Economic Events

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Housing Starts (Feb)





 Building Permits (MoM) (Jan




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