Crude oil futures are hurtling lower following Saudi Arabia's decision to slash its official selling prices to Asia, Europe and the US by a record amount, marking the start of a price war after the Organisation of Petroleum Exporting Countries's failure to strike an agreement with the Russian Federation during the previous week to curb their combined production.

As of 2240 GMT, front month Brent crude oil futures on ICE were falling 25.33% to $36.12 a barrel, alongside a 24.45% drop in West Texas Intermediate to $33.17 a barrel.

In parallel, futures on the S&P 500 were 128.75 points lower to 2,835.25, while those for the FTSE-100 were off by 244.50 points at 6,463.50.

Just after Asian trading began, Brent hit $31.02 a barrel - registering its largest fall since the start of US bombing during the first Gulf war in January 1999 - and WTI could be seen at $30.

On 6 March, Russia had agreed to extend existng oil production curbs throgh June but balked at plans for a combined reduction alongside OPEC and Kahazkstan of a further 1.5m barrels a day, leading to the oil cartel's decision to remove limits on its own output.

According to Bloomberg, which cited people familiar with the conversations, Saudi state oil giant, Aramco, had privately told certain market participants that it was set to up production to well over 10.0m barrels a day next month, possibily to as high as 12.0m b/d.

Analysts at Goldman Sachs reportedly warned prices could fall into the $20s and analysts at BofA Securities agreed, forecasting a "temporary" dip by Brent in the $20 range "over the coming weeks" and lowered their oil price projections for 2020.

Indeed, Brent prices could even fall into the teens, BofA said.

Brent was now seen averaging $45 a barrel in 2020, versus $54 a barrel beforehand, and West Texas Intermediate was seen at $41, against $49 before.

"Russia came into the Vienna gathering last week arguing that another oil production cut was not the solution to rebalance oil markets," BofA said.

"Whether Saudi Arabia disagreed with the Russian position or whether the Russian arguments around the ineffectiveness of cuts to deal with virus swayed the Saudis, the bottom line is that oil markets are about to suffer a positive supply shock just as a major negative demand shock is playing out."

The length of the price drop hinged partly on whether Saudi's actions were meant to bring Moscow back to the negotiating table or were directed at US shale oil, with the latter meaning that a "a longer lasting oil price drop was likely".

"Our $45/bbl Brent crude oil forecast for 2020 would shift to $40/bbl in this case. Yet, it is important to note too that Saudi Arabia's current account balance is still very sensitive to swings in crude oil prices. So it can hardly afford a protracted price war. As such, we adjust our 2021 forecast down only by $5 to $55/bbl for now."