Shares of just about every oil and gas stock are down more than 10% today after an emergency OPEC meeting ended in an impasse over the weekend. The result is that Saudi Arabia and Russia will no longer adhere to quotas, leading to a likely price war. At the time of this writing, the price of a barrel of Brent crude oil is down 18.6% to $36.85. Loads of companies are getting hammered, but let's focus on some big offshore companies for now. Here are their recent price changes as of 11:30 a.m. EDT.
Source: S&P Global Market Intelligence.
There will likely be dozens of articles written on what happened in that meeting over the weekend, but to avoid the backroom drama, let's look at what's on the table here. With both Saudi Arabia and Russia saying that they will not adhere to quotas, there is a lot of production capacity in the global oil market. According to CNBC, the most recent estimate of Saudi Arabia's production is 9.7 million barrels per day. The kingdom has said it intends to increase production to more than 10 million barrels per day and has the overall capacity to grow to 12.7 million barrels per day.
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Source: Motley Fool
(March 9, 2020 - 12:52 PM EDT)
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