CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure. CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure.

BP share price in freefall as Saudi Arabia escalates price war with Russia

The oil and gas major continues to see shares plummet as oil prices look to fall further as Saudi Arabia unveils plans to ramp up output, intensifying the chances of a price war with Russia.

BP shares closed 3% lower on Wednesday after Saudi Arabia unveiled plans to increase oil output in a move that could lead to an all-out price war with Russia.

State-owned oil producer Saudi Aramco told investors on Wednesday that the Saudi energy ministry had requested that it increase its production capacity by 1 million barrels per day (bpd) to 13 million bpd.

The threat of an oil price war amid weakening demand due to the coronavirus outbreak caused the commodity to suffer one of its sharpest one-day falls on Monday, with the price of the black stuff tumbling as much as 30%, with it nearly dipping below $30 a barrel.

BP closed at 316p a share on Wednesday.

Looking to trade BP and other oil stocks? Open a live or demo account with IG today.

Oil prices almost halved in 2020

The threat of an all-out price war between Saudi Arabia and Russia pushed oil prices 3% lower on Wednesday, with Brent crude down $1.17 to $36.05 a barrel while the US West Texas Intermediate (WTI) fell $1.13 to $33.23.

Oil prices have almost halved in value since the start of 2020.

You can go long or short oil with IG using derivatives like CFDs.

‘This bold move to attempt to order production to 13 (million) barrels confirms that Saudi is trying to apply maximum pressure on both Russia and the US,’ Cailin Birch, a global economist at the Economist Intelligence Unit (EIU), told CNBC via email on Wednesday.

‘By sending signals that they will flood the market as soon as possible, they may be hoping to either force Russia back to the negotiating table or to prompt a wave of bankruptcies and investment cuts in the U.S. that would have a noticeable impact on shale production,’ Birch said.

This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

Act on share opportunities today

Go long or short on thousands of international stocks with CFDs.

  • Get full exposure for a comparatively small deposit
  • Trade on spreads from just 0.1%
  • Get greater order book visibility with direct market access

See opportunity on a stock?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Try a risk-free trade
  • See whether your hunch pays off

See opportunity on a stock?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Trade a huge range of popular stocks
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See opportunity on a stock?

Don’t miss your chance. Log in to take advantage while conditions prevail.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Friday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.