Oil Slumps to Lowest Since 2016 as Demand Collapse Triggers Rout - Bloomberg:
Oil’s spectacular collapse deepened as widening global efforts to fight the spread of the coronavirus looked set to trigger the most severe contraction in annual demand in history.
Global benchmark Brent crude fell more than 12.5% after Saudi Aramco’s chief financial officer said the company is “very comfortable” with oil at $30 a barrel. Demand for fuels is falling off a cliff as a result of global restrictions to prevent the spread of virus, with gasoline futures reaching their weakest level since at least 2005.
Even a massive emergency move by the U.S. Federal Reserve to cushion the world’s biggest economy just added to the fear gripping markets. Forecasts for global oil use are being cut dramatically as government measures to contain the spread of the pandemic restrict the movement of people and throw supply chains into chaos. At the same time, giant producers are unleashing a flood of supply after the disintegration of the OPEC+ alliance.
“Oil prices remain in freefall,” Commerzbank analysts including Carsten Fritsch wrote in a report. “The more countries ‘freeze’ public life, close their borders and cancel flights, the greater the impact will be on oil demand.”
Oil’s spectacular collapse deepened as widening global efforts to fight the spread of the coronavirus looked set to trigger the most severe contraction in annual demand in history.
Global benchmark Brent crude fell more than 12.5% after Saudi Aramco’s chief financial officer said the company is “very comfortable” with oil at $30 a barrel. Demand for fuels is falling off a cliff as a result of global restrictions to prevent the spread of virus, with gasoline futures reaching their weakest level since at least 2005.
Even a massive emergency move by the U.S. Federal Reserve to cushion the world’s biggest economy just added to the fear gripping markets. Forecasts for global oil use are being cut dramatically as government measures to contain the spread of the pandemic restrict the movement of people and throw supply chains into chaos. At the same time, giant producers are unleashing a flood of supply after the disintegration of the OPEC+ alliance.
“Oil prices remain in freefall,” Commerzbank analysts including Carsten Fritsch wrote in a report. “The more countries ‘freeze’ public life, close their borders and cancel flights, the greater the impact will be on oil demand.”
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