Oil prices fall to two-decade low amidst COVID-19

COLOMBO (News1st): Oil extended its slide on Monday falling to the lowest in more than two decades, as global oil producers have come under intense pressure due to the coronavirus pandemic with a huge slump in demand and concerns that storage facilities will run out of capacity. U.S. benchmark, West Texas Intermediate, has fallen to the $15 range as economies around the world remain on lockdown due to the COVID-19 pandemic, hampering the demand for crude oil. The OPEC projects the demand for crude oil to be the lowest since 1989 and the IEA has projected a 9 million barrel per day drop year on year in 2020, but talks among the oil-producing countries to cut the production have not been successful. Recently, Saudi Arabia’s crude supply had risen to a record of more than 12 million barrels per day while U.S. crude inventories also soared by a record 15.2 million barrels, in early April. The world’s top oil producers pulled off a historic deal to cut global petroleum output by nearly a tenth, putting an end to the devastating price war between Saudi Arabia and Russia. Futures in New York fell 19 percent to less than $15 a barrel after losing almost a fifth of their value last week. The price of a barrel of West Texas Intermediate (WTI), the benchmark for US oil, more than 30 percent in today’s trading, crashing below $13 a barrel for the first time since 1999. Brent crude also declined by a further 5.95% today, closing at 26.41US Dollars per barrel.