International Benchmarks for crude oil are West Texas Intermediate (WTI) and Brent. On Monday, US crude oil slips below $15 per barrel. It is the lowest price of crude in the last two decades. Due to coronavirus pandemic concern, global demand for oil has contracted around more than 50 – 60 percent.
Brent crude prices dropped around 4 percent to $ 26.95 per barrel before rallying and closed at $28.10.
US Crude oil slips more than 19 percent and settles below $15 per barrel. Analysts said the United state’s storage facilities are getting piled up. In the next two or three weeks, storing crude oil will be a significant problem. It was the main reason for the considerable hit on Monday.
Oil markets are suffering and lurched recently due to lockdowns in significant economies. Many countries placed restrictions on air travel, the primary reason for the sharp decline in demand for air turbine fuels. Travel restrictions and lockdowns are preventive measures to stop spreading coronavirus pandemic.
The oil prices started plunging after the price war between Saudi Arabia and Russia. Both the countries-initiated price war and now all oil-producing countries are suffering. Russia and Saudi Arabia decided on a production cut. Even after the production cut deal, the crude oil market is staggering. As a result, US Crude Oil slips continuously.
ANZ mentioned in a note, and Oil prices are still under pressure, and analysts are forecasting weaker demand and oversupply of crude oil in the physical market.