A Price War Has Sent Oil Prices Plummeting

The latest coronavirus obsession is the collapse of crude oil prices over the past couple of weeks:

The nickel version of this story is that oil prices started declining in February due to fears of lower demand caused by the coronavirus outbreak. OPEC tried to cut a deal with Russia to reduce output all around, but Russia balked. Saudi Arabia then decided to bring out its big guns, lowering prices immediately by about $7 per barrel and announcing that it would increase output in order to take share away from Russia. At that point the decline turned into a rout, with the price of WTI crude collapsing to $28 as I write this. Needless to say, there’s no telling where it will be when you read this.

Anyway, just another thing to keep your eye on. On the bright side, this certainly means we’re not going to have a recession based on a spike in oil prices.

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FACT:

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Today, reader support makes up about two-thirds of our budget, allows us to dig deep on stories that matter, and lets us keep our reporting free for everyone. If you value what you get from Mother Jones, please join us with a tax-deductible donation today so we can keep on doing the type of journalism 2020 demands.

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