Bloomberg reports Aramco Slashes Crude Pricing, Starting Oil War as OPEC Flops.

Saudi Arabia kicked off an all-out oil war on Saturday, slashing official pricing for its crude and making the deepest cuts in at least 20 years on its main grades, in a bid to push as many barrels into the market as possible.

The cuts in monthly pricing by state producer Saudi Aramco are the first indication of how the Saudis will respond to the breakup of the alliance between OPEC and partners like Russia. The kingdom plans to accompany the price cuts with a hike in crude supply, according to people with knowledge of the situation.

What' Going On?

Saudi Arabia and Russia want to kill the US oil industry and frackers.

The Financial Times reported “Russia has had enough of the shale guys living off Opec-plus,” said one person familiar with negotiations, referring to the cartel and allied non-members.

Junk bonds would get crushed over this. And that will take the market with it.

Blackmail Revenge

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Please recall Trump Blackmails Germany With Sanction Threats Over Nord Stream 2

Angela [Merkel] you got to stop buying gas from Putin,” said Trump.

$36 at the Open Today?

We find out in about an hour.

Crude Collapses Since Start of Year: A Credit Implosion Up Next


On Friday (before the oil price war was official), I commented Crude Collapses Since Start of Year: A Credit Implosion Up Next

Credit Implosion Coming Up

A lot of leveraged drillers and crude suppliers dependent on prices above $50 will see a credit implosion.

That's just a start.

Supply and Demand Shock

A Supply Shock and a Demand Shock are Coming Up.

Deflationary Outcome

As noted previously, a Very Deflationary Outcome Has Begun.

Blame the Fed.

Deflation is not really about prices. It's about the value of debt on the books of banks that cannot be paid back by zombie corporations and individuals.

See the previous link for discussion.

Liquidity Crisis in Energy Space

What better time than now to blow up US oil producers heavily in debt as an act of revenge?

The liquidity crisis will quickly spread far beyond energy.

Mike "Mish" Shedlock

Housing Liquidity Crisis Coming: Debt Deflation Follows

A liquidity crisis in housing is on the way. Non-banks are at the center of the storm.

Liquidity Crisis Coming: Here, There, Everywhere

Jim Puplava thinks a liquidity crisis is on the horizon. I agree, adding that the problem is global.

Oil Pricing: How Many Blends Are There?

When people refer to the price of oil, they typically mean either WTI (US West Texas Intermediate) or Brent Crude from the North Sea. However, the number of blends goes far beyond the typically quoted benchmarks.

Oil Shock, Crude Surges 20%, Treasuries Untouched: One Is Wrong, Which One?

In the wake of the attack on Saudi Arabia, crude futures jumped as much as 20%. Treasury yields are flat. One is wrong!

War in the Mideast? Saudi Arabia Says Lebanon Declared War

Saudi Arabia says Lebanon has declared war on it. In response, the Saudis announced a blockade of Yemen. Trump backs Saudi Arabia. War coming?

The Art of a Failed Oil Deal

West Texas Intermediate crude fell below the $20 mark again today. The Oil pact has failed already.

Trump Tweet Blasts OPEC for "Artificially Very High Oil Price"

Trump is Tweeting away as usual today. One of his targets is OPEC.

Donald of Arabia, Oil Sanction Idiocy: Another Oil Shock Coming

I did not believe Trump would be so foolish as to force the entire world to accept Iranian sanctions. I was wrong.

US War Hawk Nut Case Senator Graham Responds to Saudi Refinery Attack

Lindsey Graham suggests the U.S. should strike Iranian oil refineries in response an attack by Yemen on Saudi Arabia.