This could be painful.
Saudi Arabia wanted OPEC plus, a group led by Russia, to slash oil production by 1.5 million barrels per day. The Russians balked, which sent oil prices crashing on Friday, with West Texas Intermediate trading around $41 and Brent Crude trading near $45.
On Saturday, Saudi Arabia responded by discounting its pricing on April crude deliveries by more than $10 below Brent Crude prices, whereas Russian oil trades at a $2 discount.
The move is clear. It’s a hammer blow meant to punish Russia for refusing to join the group while taking market share from other producers at the same time.
Based on the latest prices, Goldman estimates oil will trade in the $30s soon, with dips into the $20s. Gasoline will be cheap, but the energy sector will lose jobs.