Oil prices hit record lows after Saudis announce price cut

Oil prices have dropped to a 20-year low, following Saudi Arabia’s announcement late Sunday that it would slash prices next month. 

Saudi Arabia’s decision follows a failed negotiation in which leaders asked Russia to cut back its oil production to maintain higher prices, amid global market uncertainty sparked by the coronavirus outbreak. 

The outbreak has created a decreased in demand for crude oil.

The failed negotiation was part of major talks last week between the group of oil-producing nations known as OPEC and 10 other countries that do not belong to that group of oil-exporting nations.

American oil companies took massive hits;  U.S. West Texas Intermediate crude futures fell by more than 20 percent, as did Brent crude futures. Analysts warn that prices could plunge as low at $20 per barrel.

“Coronavirus and OPEC+ falling apart were not expected or priced into the market a month ago,” Rebecca Babin, a senior equity trader for CIBC Private Wealth Management told CNBC.