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Representative image (Reuters).
Oil prices have plunged about 80% this year as the pandemic has spread across the world, killing nearly 180,000 people, routing financial markets and causing the worst economic collapse since the depression of the decade. from 1930.
- Reuters TOKYO
- Last update: April 22, 2020 1:51 PM IST
Oil prices fell again on Wednesday, with Brent falling to the lowest level since 1999, as the market struggled with a huge excess of crude amid a collapse in demand for everything from gasoline to jet fuel caused by the coronavirus outbreak.
Brent crude, which fell 24% in the previous session, touched $ 15.98 a barrel, its lowest level since June 1999. It was trading down $ 2.70, or 14%, at $ 16.63 at 0432 GMT.
West Texas Intermediate fell 68 cents, or 6%, to $ 10.89 a barrel.
The declines come immediately after two of the wildest days in the history of the oil trade, as global supply appears to overwhelm demand in the coming months and current production cuts are far from offsetting that excess.
The U.S. contract for the first month fell into negative territory for the first time in history on Monday and set a record for the number of contracts traded on Tuesday.
Oil prices have plunged about 80% this year as the pandemic has spread across the world, killing nearly 180,000 people, routing financial markets and causing the worst economic collapse since the depression of the decade. from 1930.
The viral outbreak has caused fuel demand to drop approximately 30% worldwide, and energy companies in the United States, the world’s largest producer, are struggling to find storage for excess oil.
“This is a direct result of excessive investment that coincides with a sudden shock to demand in a landlocked area with limited storage and transportation,” Goldman Sachs said in a report.
Volatility in the oil market has led the CME Group, the world’s largest commodity exchange, to increase margins on crude oil futures.
On Tuesday, the United States Senate approved nearly $ 500 billion in additional support for the United States economy and hospitals and will send the measure to the House of Representatives for final approval later this week.
But there is global concern that no amount of pump priming will suffice, as business executives prepare for a prolonged slump in demand and many fear that their companies will not survive.
US crude oil inventories USA They rose 13.2 million barrels in the week of April 17 to 500 million barrels, data from the American Petroleum Institute industry group showed Tuesday. Analysts had expected a construction of 13.1 million barrels.
Official government data will be released on Wednesday.
