Oil’s rout: on fall in prices

International markets, already teetering from the effect of the coronavirus, got a jolt over the weekend as Saudi Arabia cut oil rates and stated its objective to increase output well beyond what the oil market can absorb currently. The Saudi response followed the Organisation of the Petroleum Exporting Countries (OPEC) cartel and Russia, the biggest non-OPEC manufacturer, failing to reach an arrangement to deepen existing production cuts to handle the falling demand. Oil rates crashed over night by almost a 3rd to $31 a barrel consequent to the kingdom slashing prices and announcing its intent to increase output. The oil market is now set to witness the unusual combination of a need and a supply shock which is bad news for rates. Fears of a fall in need following the break out of COVID-19 had