The international oil prices have tumbled to a record low in 18 years, breaking the mark of 20 dollars per barrel. Experts say that concern over a fall in demand for oil from the shock of COVID-19 is precipitating the plunge in oil prices.
On Wednesday (local time), the NYMEX saw the price of WTI crude dipping 1.2% from a day earlier to close at 19.87 dollars per barrel. This marks the lowest figure since February 2002. Earlier this year, the price of WTI crude hovered near 60 dollars per barrel but has been plummeting to below 20 dollars in merely three months. London Brent oil also tanked 6.45% to close at 27.69 dollars per barrel.
Last Sunday, OPEC Plus announced that they will slash 9.7 million barrels of oil production a day for two months starting from May 1, but experts say that the trade-off won’t be enough to cover the falling demand.
The International Energy Agency (IEA) predicted that the average oil demand in April will decrease by 29 million barrels as against 2019, which will be a record low since 1995. This is a 30% fall from last year’s global oil consumption, which stood at around 100 million barrels a day.
America’s massive oil stock surplus is fueling the downward pressure on oil prices. The U.S. Energy Information Administration announced that the U.S. crude stockpiles jumped by 19.2 million barrels last week, much higher than the expert prediction at 12.02 million. “Even assuming that travel restrictions are eased in the second half of the year, we expect that global oil demand in 2020 will fall by 9.3 million,” said the IEA, adding that it will wipe out “almost a decade of growth.”
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