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Photo: Alexey Nikolskey/Sputnik/AFP via Getty Images

Saudi Arabia plans to boost oil output and sharply cut prices, signaling the first response to Friday's collapse of OPEC's production-cutting pact with Russia and allied producers, according to multiple reports.

Why it matters: The unraveling of the OPEC+ agreement, at least for now, and declining oil demand due to the novel coronavirus' economic toll are upending global oil markets and geopolitics.

  • Oil prices plunged by roughly 10% on Friday and could see another sharp decline when Asian markets open Sunday night on the U.S. East Coast.

Driving the news: Saudi Arabia plans to boost production to well over 10 million barrels per day, compared to 9.7 mbd now, when OPEC-Russia output limits expire at month's end, per Bloomberg and Reuters.

  • Bloomberg also reports that the Saudis have privately signaled they could eventually raise output to 12 mbd.
  • "The shock-and-awe Saudi strategy could be an attempt to impose maximum pain in the quickest possible way to Russia and other producers, in an effort to bring them back to the negotiating table, and then quickly reverse the production surge and start cutting output if a deal is achieved," Bloomberg reports.
  • Saudi state oil giant Aramco is also sharply cutting export prices starting next month, including "the biggest cut ever for Arab Light crude for Asia," according to S&P Global Platts.

The big picture: Friday's failure to extend and deepen the OPEC+ production limits marks at least the temporary end of OPEC's three-year joint effort with Russia to tighten markets and prop up prices.

  • The new fight for market share is likely to drive down prices even further, something that will also bring new problems for U.S. shale producers already facing challenging economics.

What's next: Tomorrow morning the International Energy Agency will announce its latest analysis of how much COVID-19 is estimated to curtail global oil demand this year.

Go deeper

Biden says $1,400 stimulus payments can start going out this month

Photo: Samuel Corum/Getty Images

President Biden said Saturday that the Senate passage of his $1.9 trillion COVID relief package means the $1,400 direct payments for most Americans can begin going out later this month.

Driving the news: The Senate voted 50-49 Saturday to approve the sweeping legislation. The House is expected to pass the Senate's version of the bill next week before it heads to Biden's desk for his signature.

7 hours ago - Health

COVID-19 drives smell loss awareness, research

A health worker carries out an olfactory test outside Buenos Aires. Photo: Alejandro Pagni/AFP via Getty Images

The pandemic has thrust a relatively unknown ailment, anosmia — or smell loss — into the international spotlight.

Why it matters: Researchers hope smell testing becomes as standard as the annual flu shot, helping to detect early signs of neurodegenerative diseases like Alzheimer’s and Parkinson’s.