Brent crude falls to its lowest level since 2002 amid Corona Outbreak. The pandemic has caused the global shutdown, thereby decreasing demand for fuel.
As expected, COVID-19 spread will lead to a 20% drop in fuel consumption and its demand worldwide. Brent futures plunged $2.17 whereas U.S. West Texas intermediate (WTI) slipped $1.42 i.e., close to 6.6%. The prices have taken the lowest hit since the year 2002.
Trafigura, the Commodities trader, estimates that the decline in oil demand could be around 30 million barrels per day in April 2020. it is somewhere around one-third of daily fuel demand.
All the prominent crude benchmarks are witnessing losses for a consecutive five weeks since the eruption of a price war between Russia and Saudi Arabia. The battle is the outcome of discontinuance of a three-year-old deal that limits supply between Moscow’s producers and OPEC.
Negotiations took place between both the producers as well as the U.S. However; nothing changed as of now. Instead, Saudi Arabia announced a boost in oil exports from May 2020. U.S President Trump and Russian President Putin agreed for their top energy officials to meet over a telecall. They would discuss falling oil markers globally.
Bank of America has forecast lower oil prices for a consecutive time in the last two weeks. Bofas economist also predicted a contraction in Global GDP for the first half of the year 2020. Bofa reduced 2020 price and forecasted $37 per barrel for Crude Brent, as for WTI, the same is $32.