Oil Resumes Plunge After IEA Warns That Demand Is in ‘Free Fall’ - Bloomberg

Oil Resumes Plunge After IEA Warns That Demand Is in ‘Free Fall’ - Bloomberg:

PRICES:

• U.S. marker West Texas Intermediate fell $1.89 to $22.60 a barrel in New York
• Global benchmark Brent crude declined 3.8% to $26.34 a barrel

Futures in New York tumbled 7.7% in New York, dropping for the first time this week, after IEA executive director Fatih Birol said demand could drop as much as 20 million barrels a day. The gloomy outlook exacerbated investor pessimism driven by a U.S. decision to rescind a crude-buying offer after failing to win funding from Congress.

Market gauges have been signaling weakness, with key swaps in the North Sea plummeting, and U.S. traders and consultant IHS Markit raising alarms about storage space running out. Goldman Sachs Group Inc. also warned of a massive contraction in demand that not even a supply freeze or cut from OPEC could rectify.

“We’ve never seen something like this before,” said Mike Hiley, president of OTC Futures. “Oil is going to continue to be stuck in this rut given the simultaneous supply and demand shocks. Stimulus doesn’t really help these issues. Just because people have more money in their pockets, doesn’t mean they’re getting in their cars.”