The huge downfall in oil markets is observed on today (April 20).
According to the details, US oil price rushed 94%, decreasing as low as $1 per barrel.
The sources said that this is the lowest since New York Mercantile Exchange (NYMEX) introduced oil futures trading in 1983.
The managing director at Fathom Consulting Erik Britton, Oil prices are lower in real terms than at any point since the 1970s.
While talking to English daily he also said, “Despite the deal to cut oil production, brokered by President Trump, oil prices have continued to track downwards – the promise of reduced supply has not kept pace with the expected reduction in demand, so far.
It is one of life’s curiosities, for macro economists, that the US president would intervene to keep oil prices up, unless for environmental reasons, which feels unlikely with this administration. The US economy, like most advanced economies, is a substantial net beneficiary in the round from lower oil prices, even if the oil-producing sector is hurt.”
The record output contract by Organization of the Petroleum Exporting Countries (OPEC) and allied members a week before to curb supply is proving too little too late in the face a one-third fall in global demand.
This shows that how oversupplied the US oil market has become with manufacturing and financial activity crushing to a stop as governments around the globe extend lockdown due to control the spread the coronavirus pandemic.