By 23,20 USD for the WTI and 27,27 USD for the Brent. The last time we faced such prices was in 2015 – 2016.
Yes, remember what happened between the U.S. and Saudi Arabia.
At the time, the shale revolution and the conversion of Sabine Pass LNG (Liquefied Natural Gas) import terminal into a 30 mtpa liquefaction terminal (mtpa: Million Metric Tonne Per Annum), allowed the U.S. to become a net natural gas exporter. Then, Saudi Arabia decided to raise its oil production in order to stop other market players with higher production costs and keep market shares with lower prices. This competition for market share led to a huge drop down in oil price. In 2016, crude oil reached less than 30 USD the barrel.
The situation in 2020 is not much different from 2016. This is basically the same thing that is happening now, but instead of the U.S. it is now the Russian Federation that forces KSA to increase its production. Indeed, since the beginning of the worldwide COVID-19 pandemic, oil demand has plunged and KSA (Kingdom of Saudi Arabia) asked Russia to reduce its oil production in order to maintain prices level. Russia refused and KSA took the same decision it took in 2016, increase its oil production.
The drop down in oil prices is not something new. This is something we face on a regularly basis when oil producing countries are not able to make production agreements.