Witnessing a 20 years historic crash, United States Oil Prices cut as the global pandemic hits international demand for crude.
Media reports said that United States oil prices crashed to a more than two-decade low as the coronavirus pandemic hits global demand for crude
West Texas Intermediate (WTI)— the US oil benchmark — plunged in early Asian trading, as much as 20.8 per cent to $14.47 a barrel, marking the lowest level since 1999.
Business analysts said Jason Gammel said the oil industry faced “the bleakest oil macro outlook since at least the late 1990s and perhaps ever”,
The continued fall in oil prices come despite an Opec-backed deal to cut roughly 10 per cent of global crude supply.
The reductions planned to run until April 2022 as part of efforts to stabilize prices pummeled by the worldwide spread of coronavirus also known as COVID-19.
Monday’s fall partly driven by the imminent expiration of the WTI May futures contract on Tuesday.
Contracts for WTI delivery in June by comparison were only down 5.2 per cent to $23.72, partially supported by an influx of retail investors in recent weeks trying to pick the bottom in oil prices.
“I would certainly put the majority of the losses so far today down to the expiration,” said Robert Rennie, global head of market strategy at Westpac. “The risk is June WTI gets pulled below $20 in the next couple sessions.”
Brent crude, the international benchmark, down only 0.8 per cent at $27.86 a barrel.
Asia Equity markets
Equity markets in Asia also under pressure on Monday.
China’s CSI 300 index of Shanghai- and Shenzhen-listed stocks fell 2.7 per cent even as Chinese banks lowered the loan prime rate, the country’s lending benchmark, by 0.2 percentage points to 3.85 per cent.
In Hong Kong, the Hang Seng index dropped 0.6 per cent, while Japan’s benchmark Topix fell 0.5 per cent and Australia’s S&P/ASX 200 shed 1.6 per cent.