US crude falls below US$15 a barrel, down about 20%
21 April, 2020
US crude fell about 20 % to below US$15 a barrel on Monday (Apr 20), its lowest level in about two decades, as a coronavirus-triggered collapse popular eclipsed a deal to cut output.
West Texas Intermediate, the US benchmark, fell 18.7 % to US$14.84 a barrel.
Brent crude, the international benchmark, was off 1.5 % at US$27.64 a barrel.
Oil markets have plunged in recent weeks as lockdowns and travel restrictions around the world batter demand for the commodity.
The crisis was compounded after Saudi Arabia, kingpin of exporting group OPEC, launched a price war with non-OPEC member Russia.
They drew a line under their dispute earlier this month if they and other countries agreed to cut output by almost 10 million barrels a day to boost virus-hit markets.
But prices have continued to fall heavily, with analysts saying the cuts will never be enough to make up for massive falls popular due to the pandemic.
"Crude oil prices remained under great pressure, as projections of weaker demand weigh on sentiment," ANZ Bank said in a note.
"Regardless of the OPEC+ alliance agreeing to an unprecedented cut in output, the physical market is awash with oil," it said referring to the business of the Petroleum Exporting Countries and non-OPEC partners.
"Concern continues to mount that storage facilities in america will go out of capacity," the bank added.
THE UNITED STATES Energy Information Administration said crude inventories in the world's biggest economy rose by 19.25 million barrels last week, increasing the woes of the oversupplied world market, where demand has been hammered by the coronavirus pandemic.
The oil industry has been swiftly reducing production in the face of an estimated 30 % decline in fuel demand worldwide.
Saudi Arabian officials have forecast that total global supply cuts from oil producers could total practically 20 million bpd, but which includes voluntary cuts from nations just like the USA and Canada, which cannot simply start or off production in the same way as most OPEC nations.
Numerous majors have announced supply reductions, including Chevron Corp, BP and Total. But economic growth is sagging swiftly, and physical crude markets suggest prices could keep falling.
North American exploration and production companies have cut their budgets by roughly 36 % on a year-over-year basis, according to a Sunday note from James West, analyst at Evercore ISI, while international companies have cut budgets by 23 %.
Source: www.channelnewsasia.com
TAG(s):