Anthony Lerner, senior vice president of industrial commodities at brokerage R.J. O’Brien & Associates LLC, points out that the switch in Suadi Arabia’s structure “triggered a cascade of selling” from algorithmic traders Tuesday, reports Nicole Friedman for the Wall Street Journal.

The shift in the U.S. contract structure is “the final nail in the coffin of the market,” Lerner said in the article, forecasting prices to continue to fall. “It means there’s a lot of supply.”

Meanwhile, the Organization of Petroleum Exporting Countries have also resisted pressure to curb output, which would have supported oil prices.

Saudi’s lower price targets are an attempt to push out U.S. shale oil producers, who require a higher oil price to maintain profitable margins. Recently, Citigroup argued that “full-cycle” costs, which include land, infrastructure, well drilling and operating costs, for new shale projects require oil prices of at least $70 to $80 per barrel. [Oil ETFs Languish Under Extended Bearish Outlook]

“People are panicking,” Bill O’Grady, chief market strategist at Confluence Investment Management, said in the Bloomberg article. “There is this pervasive belief that the Saudis are in a market-share war.”

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Max Chen contributed to this article.