Crashed global oil markets rebound in early trade: still trading less than $2 per barrel

COLOMBO (News1st): US oil prices fell below zero for the first time in history yesterday, as the evaporation of demand caused by the coronavirus pandemic has paved the way for a shortage in storage capacity — meaning producers are paying buyers to take it off their hands. West Texas Intermediate futures, which have been the benchmark for the oil industry for decades, had slumped from $17.85 a barrel to minus $37.63 by the end of yesterday. Though Prices rebounded back above zero this morning, oil was still trading at just $1.38 a barrel at 12:21 p.m. Singapore time. Global oil markets have fallen to its 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. 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.