US crude falls below $15 a barrel as virus throttles demand

US crude crashed to below $15 a barrel on Monday, its lowest level for over two decades, as concerns about a virus-triggered demand shock and lack of storage eclipsed an output cut deal.

West Texas Intermediate (WTI), the US benchmark, fell more than 19 percent to $14.73 a barrel in early Asian trade, before markets steadied and it clawed back some ground to $15.78 a barrel.

International benchmark Brent dropped 4.1 percent to $26.93 a barrel, before rising and stabilising at $28.11.

Oil markets have plunged in recent weeks as lockdowns and travel restrictions to fight the coronavirus around the world batter demand for the commodity.

The crisis was compounded after Saudi Arabia, kingpin of exporting group OPEC, launched a price war with non-OPEC member Russia.

Riyadh and Moscow drew a line under their dispute earlier this month when they and other countries agreed to cut output by almost 10 million barrels a day to boost virus-hit markets.

But prices have continued to fall heavily, with analysts saying the cuts will not be enough to make up for massive falls in demand caused by the pandemic.

WTI was hit particularly hard on Monday as analysts said there were concerns that its main storage facilities in the United States were filling up.

Michael McCarthy, chief market strategist with CMC Markets, said the plunge in WTI “reflects a glut” at the US facility in Cushing, Oklahoma.

The benchmark has now “decoupled” from Brent “with the spread between the two reaching a decade high”, he said in a note.

ANZ added in a note that “crude oil prices remained under pressure, as projections of weaker demand weigh on sentiment”.

“Despite the OPEC+ alliance agreeing to an unprecedented cut in output, the physical market is awash with oil,” it said, referring to the Organization of the Petroleum Exporting Countries and non-OPEC partners.

“Concern continues to mount that storage facilities in the US will run out of capacity.”

The US Energy Information Administration said crude inventories in the world’s biggest economy rose by 19.25 million barrels last week, adding to the woes of the oversupplied world market.

Comments

See how Tinubu reacts to #EndSARS protests, says police reforms has begun

See how Tinubu reacts to #EndSARS protests, says police reforms has begun National leader of the All Progressives Congress (APC) Bola Tinubu has said the protest against police brutality in Nigeria is within the constitutional right of Nigerians. “Asiwaju Tinubu believes in the right of Nigerians to freedom of expression, assembly, and protest where and when necessary, he has always canvassed the need for people to explore peaceful channels to ventilate their views and demands,” Tinubu said in a statement by his media aide Tunde Rahman. “He believes the #EndSARS protesters have made their demands, which the Federal Government is studying.” Tinubu’s statement comes after being alleged of being one of the sponsors of the ongoing nationwide protest against brutality, extortion, harassment and extrajudicial killing by police personnel. The Cattle’s Breeders Association known as Miyetti Allah had earlier accused Tinubu of using the protest to distort the administration of President Muh...

President Trump vetoes congressional resolution limiting his military authority against Iran

President Trump vetoes congressional resolution limiting his military authority against Iran US President Donald Trump, has vetoed the Iran War Powers resolution agreed by the Senate and House of Representatives, calling it a "very insulting resolution" and argued the move of the Lawmakers was "based on misunderstandings of facts and law" in a statement. The bipartisan resolution was created to limit Trump's authority to use military force against Iran without congressional approval, after the President's decision to order a strike that killed Iranian commander Qasem Soleimani in January. Before a resolution is made a law in the US, the Senate, House of Reps have to vote on it, when an agreement is reached it is then sent to the White House for the President to sign. Presidents sometimes veto laws, but the US Senate must have over 2/3rds of votes to override a President's veto, a scenario unlikely to occur. Trump in a statement issued by the ...

Pompeo presses China but acknowledges ‘no certainty’ virus from lab

Pompeo presses China but acknowledges ‘no certainty’ virus from lab US Secretary of State Mike Pompeo on Wednesday renewed his widely contested charge that the coronavirus pandemic likely originated in a Chinese laboratory, but acknowledged there was no certainty. Pompeo renewed his call for global pressure on China to provide more data on the origins of the illness, which has killed more than 250,000 people worldwide and hobbled the global economy. “We don’t have certainty, and there is significant evidence that this came from the laboratory. Those statements can both be true,” the former CIA chief told reporters when pressed on his statements. “The American people remain at risk because we do not know … whether it began in the lab or whether it began someplace else,” he said. “There’s an easy way to find out the answer to that — transparency, openness — the kinds of things that nations do when they really want to be part of solving a global pandemic.” Pompeo ha...

Gtechone

Search This Blog