Oil dropped toward the lowest level since 2003 as demand plunged as governments froze economic activity to combat the coronavirus, and prospects for a OPEC-Texas production deal faded.
Futures in London fell 5.6% to near $25 a barrel as some traders estimate crude demand will collapse by as much as 20 million barrels a day this year. Texas Railroad Commissioner Ryan Sitton on Friday landed a rare invitation to attend OPEC’s June meeting, but hopes for an agreement began to unravel just hours later as his call to curb output was criticized by regulators and drillers.
“We are now looking at a scale of surplus in the second quarter we probably never have seen before,” said Bjarne Schieldrop, chief commodities analyst at SEB.
Policy makers around the world are taking measures to combat the virus. But the process could take additional time in the U.S. as the two political parties work out their differences. Democrats in the U.S. Senate blocked a Republican economic recovery package of nearly $2 trillion, describing it as too focused on corporations at the expense of workers. Equities dropped globally along with American futures.
Brent for May settlement lost $1.50 to $25.48 a barrel on the ICE Futures Europe Exchange as of 11:51 a.m. in London after dropping to as low as $24.68 earlier. That’s less than the benchmark’s $24.88 a barrel close on Wednesday, which was the lowest since May 2003.
WTI for May delivery dropped 43 cents to $22.20 a barrel on the New York Mercantile Exchange after falling to as low as $20.80. The April contract plummeted 29% last week, the most since 1991.
No comments:
Post a Comment