Oil Price Drop to Lowest Ever in 21 Years
Crude oil prices still slide downwards, falling below $15 which is that the lowest since 1999 as traders worry over the slump in demand thanks to COVID-19.
Analysts are of the view that countries are quickly running out of storage for crude after output cuts proved insufficient to counterbalance the COVID-19 related drop by demand.
At the time of filing this report, prices on the May contract for West Texas Intermediate crude futures dropped by almost 20% or $3.97 to $14.30 per barrel during the intraday trading.
Consistent with Retinitis, the derivative instrument is about to expire on Tuesday. Brent petroleum was down by 3.35% or $0.95 to $27.07. Whereas the June WTI contract fell by quite 7% to $23.27.
A.A.H Soomro, director at Khadim Ali Shah Bukhari Securities says that the demand contraction is keeping the oil slippery alongside topped up storage capacities round the world.
He added that the resumption of economic activities should bring oil prices up after two tough weeks.
International petroleum analyst Osama Rizvi expects further bearishness within the markets because he thinks, “We are out of ammunition.”
He stated that central banks have reduced interest rates and OPEC+ had their deal last week. Both of them didn’t work.
“There may be a limit to what producers can cut the sole solution to the present is demand, which I don’t see learning within the near future,” added Osama.
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