After falling 30% overnight, oil prices settled 24% lower Monday after the OPEC+ meeting last week ended without an agreement for production cuts. Saudi Arabia, the world's lowest cost producer, announced sharp discounts last night for April contracts, in an apparent bid to force Russia's hand, after the meeting Friday of oil cartel OPEC and its allies, ended without a deal. 

After Russia rejected a proposed 1.5 million barrel per day production cut on Thursday from the OPEC leader, Saudi Arabia announced price discounts over the weekend, and the intent to increase production from its current 9.7 million to over the 10 million barrel-per-day level, according to Reuters. 

oil price drop

Image source: Getty Images.

Largest drop in nearly 30 years

The onset of the price war caused the commodity to plunge the most since the Gulf War in 1991, amid a still unknown level of demand drop resulting from the economic impacts of the spread and containment attempts related to the coronavirus. 

With the supply increase, and full Saudi capacity reportedly at 12.5 million barrels per day, energy stocks plunged across the board on Monday. Exploration and production companies including Apache Corp. (NYSE:APA), Occidental Petroleum (NYSE:OXY) and Marathon Oil (NYSE:MRO) sank around 50% on the day. 

Majors including ExxonMobil (NYSE:XOM), BP (NYSE:BP), and Chevron (NYSE:CVX) also each dropped double digits on the day. Traders are now watching to see whether Saudi Arabia and Russia reach a "Hail Mary" deal and what the reaction will be from U.S. producers to try and support prices.