The price of oil is a record price cut for the Brent brand

Illustration / REUTERS

After the historical decrease in the value of North Texas West Texas Intermediate (WTI), the price of European Brent oil has also increased significantly. During trading hours on Tuesday, April 21, the June WTI crude oil futures price fell below $ 10 a barrel, losing more than half the value of the day.

This was reported by Bloomberg’s online charts.

June WTI contracts are trading at $ 17 a barrel. However, at one point, prices fell below $ 7 a barrel. As reported, on April 20, the May WTI oil futures price turned negative for the first time in the history of trade. This was caused by a sharp decline in demand for black gold, along with the technical characteristics of the auction: the close of May futures on Tuesday night. Relative to the value of the European benchmark Brent index, the June futures price fell to $ 18.10 a barrel on April 21, more than 25 percent lower than the previous day.

The situation in the oil market continues to be unstable due to a significant excess of supply of raw materials over demand. The latter has been significantly affected by the coronavirus pandemic and the restrictive measures adopted in many countries. Soon, oil storage in many countries will be filled to the brim and there will be no way out. Announced by major oil-producing countries, a significant reduction in oil production may not offset the current shift between low demand and oversupply, analysts warn.

Also readHistorical drop in oil prices: how cheap “black gold” will affect the world and Ukraine

Recall that on March 6, Russia and the Organization of the Petroleum Exporting Countries (OPEC) failed to extend the agreement to reduce oil production. After that, oil prices hit a record low, which led to the collapse of the ruble. It also affected world markets, where a massive collapse immediately began.

On April 12, members of OPEC +, Saudi Arabia’s largest oil exporter, agreed with Russia to cut production by 9.7 million barrels per day. This will ensure that prices rise again after the rapid decline in oil prices almost twice. The key obstacle to reaching the final agreement was the position of Mexico, which did not want to proportionally assume the same commitments as 22 other oil-producing countries.

During the April 20 tender, US WTI oil. USA It fell sharply and its value initially fell to a dollar, then to zero, then the price turned negative and then rose to 22-35 cents a barrel. Thereafter, the London ICE Stock Exchange experienced a sharp collapse in value by more than 300% and the price was less than $ 40 per barrel.