US oil slips below $15 a barrel on storage worries

US oil prices fell heavily on Monday and slipped below $15 a barrel on renewed storage concerns as the coronavirus throttles demand, even as producers start slashing output to boost markets.

American benchmark West Texas Intermediate dropped 15 percent to $14.39 a barrel in Asian afternoon trade, reversing direction after several days of gains last week.

Brent crude, the international benchmark, was off nearly six percent at $20.16 a barrel.

Oil prices have collapsed in recent weeks as demand evaporated because of lockdowns and travel restrictions imposed worldwide to fight the virus.

Last week, US oil fell below zero for the first time as investors scrambled to offload it before the expiry of a trading contract, but could not readily find buyers.

Prices have recovered since, but remain at their lowest levels for years.

A key worry for traders is that storage facilities — particularly in the United States — cannot cope with the oversupply.

“Concerns surrounding rising global inventories, especially in the US with the coronavirus pandemic weighing on gasoline consumption, are pressuring oil prices,” said Kim Kwangrae, a commodities analyst at Samsung Futures Inc.

The oversupply could test storage capacity limits in three to four weeks as tanks fill up, Goldman Sachs warned in a report.

The continued concerns about storage overshadowed signs that some countries — including Kuwait and Algeria — are starting to slash production in line with a major agreement hammered out this month.

Top producers have agreed to reduce output by 10 million barrels a day from May to shore up markets, a deal that marked an end to a price war between Russia and Saudi Arabia.

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...

Trump backtracks on scrapping of White House coronavirus task force

Trump backtracks on scrapping of White House coronavirus task force President Donald Trump on Wednesday appeared to backtrack on plans announced the previous day to shut down the task force advising him on the coronavirus pandemic. The White House’s earlier suggestion that the high-level team could close around the start of June was Trump’s latest signal that he thinks it’s time to move on from the health crisis and reopen the economy. But in a series of tweets Wednesday, he said the task force had been so successful that it “will continue on indefinitely with its focus on SAFETY & OPENING UP OUR COUNTRY AGAIN.” The president, however, said that he could “add or subtract people” to the group, which suggested the situation remained fluid. Vice President Mike Pence, who heads the task force, said Tuesday he was “starting to look at the Memorial Day window, early June window” for shutting it down. That holiday falls on May 25. The coronavirus task force has spearheaded...

Operators seek tax holiday, subsidy to save airlines

Operators seek tax holiday, subsidy to save airlines Worried by the fate that awaits local carriers, operators yesterday, appealed to the Federal Government to introduce some economic recovery measures to safeguard airlines from collapse. The operators, currently burdened by recurrent costs, are seeking aviation intervention fund at an interest rate of not more than five per cent. They suggested that government could take a cue from the American model of offering 50 per cent funding and grants, and 50 per cent palliatives through waivers and suspension of taxes, levies and fees among others. Besides, they called for the implementation of President Muhammadu Buhari’s Executive Order on Removal of Value Added Tax (VAT) from all forms of transportation; as domestic airlines are still the only forms of transportation paying VAT. The current restriction of both local and foreign commercial flight services has forced domestic carriers into fin...

Gtechone

Search This Blog