The oil market meltdown and its global impact

FRANKFURT, Germany (AP) — A clash of two oil titans - Saudi Arabia and Russia - is sending shock waves through energy markets, with wide-ranging implications for consumers and oil companies, including those in the No. 1 producing country, the United States.

The spat between these vital oil suppliers comes at a critical moment; the coronavirus outbreak is squeezing economies around the globe to the point where world oil demand is forecast to shrink in 2020 for the first time since 2009.

Oil prices fell Monday by the most in one day since the 1991 Gulf War. The price of U.S. crude fell as much as 34% to $27.34 a barrel, a stunning drop for one day and the lowest price since early 2016.

The decline followed Russia’s refusal last week to join the OPEC oil cartel in proposed production cuts aimed at supporting prices. Thwarted in its search for cuts, Saudi Arabia, the leading OPEC member, sharply changed course over the weekend by cutting prices and signaling it will ramp up production.