Energy sector stocks (XLE -5.6%) plunge after Russia shot down OPEC's plan to cut production by an additional 1.5M bbl/day in the wake of the coronavirus.
Crude oil futures crash as much as 9%, with April WTI recently -8.4% to $42.04/bbl after hitting its lowest level since August 2016 and May Brent -8.3% to $45.82/bbl for its weakest since at least June 2017.
"Russia's refusal to support emergency supply cuts would effectively and fatally undermine OPEC+'s ability to play the role of oil price stabilizing swing producer," says Rapidan Energy's Bob McNally. "It will gravely rupture the budding Russian-Saudi financial and political rapprochement. The result will be higher oil price volatility and geopolitical volatility."
Existing production cuts will remain in place until the end of March as planned, but it is not known if they will extend beyond this month.
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