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The Coronacrash and Oil War Infect Middle East Markets-Saudi Arabia down 8.3%

08.03.20 11:15 ET

Just when everyone thought the PPT inspired rally was enough to make financial markets immune from the coronavirus caused coronacrash, along comes OPEC and Saudi Arabia to introduce a massive amount of deflationary pressure on global commodities, along with central bankster incompetence (from Bloomberg):

Saudis Plan Big Oil Output Hike, Beginning All-Out Price War

These two paragraphs from the article is all you need to know:

The world’s largest oil exporter engaged in an all-out price war on Saturday by slashing pricing for its crude by the most in more than 30 years. State energy giant Saudi Aramco is offering unprecedented discounts in Asia, Europe and the U.S. to entice refiners to use Saudi crude.

At the same time, Saudi Arabia has privately told some market participants it could raise production much higher if needed, even going to a record 12 million barrels a day, according to people familiar with the conversations, who asked not to be named to protect commercial relations. With demand ravaged by the coronavirus outbreak, opening the taps would throw the oil market into chaos.

The market reaction this morning in the Middle East was immediate, even as the virus spreads far and wide in the area. The Saudi Arabian Tadawul Market cratered 8.3%:

Charts from Investing.com

The United Arab Emirates was not spared either as Dubai was smoked:

Charts from Investing.com

Abu Dhabi also:

Charts from Investing.com

Qatar caught a milder version of the downdraft, but still hit hard:

Charts from Investing.com

Even Israel’s TA-35 was zapped with the sniffles:

Charts from Investing.com

This could be a preview for what is going to happen tonight. Stay tuned my friends, as I fear the world markets are about to enter a very dangerous phase with little political leadership, Turkey and Greece staring down a potential war on their border, Iran’s government dying one Mullah at a time from the virus, and Chinese production still largely offline as the American media refuses to publicize or publish the truth about what is happening to the global supply chain.

Look for a LOT of volatility in U.S. futures markets tonight as the lack of any bottom in WTI prices could indicate a massive repricing of our energy equities along with a wave of defaults in the various shale boom regions inside our nation. The economic cornoarecession might well get worse if action is not taken immediately by our leaders, both in the financial and political world.