Oil price slumped to a 17-year low this week as coronavirus lockdowns barrelled through the world’s largest economies, leaving the market overwhelmed by slumping demand and swelling inventories.
Brent crude has lost 67 per cent of its value so far this year, with March alone accounting for a drop of 56 per cent as it plummeted to its lowest level since early 2000s.
Brent trades at US$23.15, having recovered slightly from its Monday close of $22.76.
As their price war continues amid severely hampered demand, U.S. shale producers have announced swift spending cuts.
Meanwhile, WTI crude hovers around the $20 a barrel mark even as the slowdown in oil refining looks set to accelerate as the global lockdown intensifies as the coronavirus continues to spread.
Crude demand will be constricted for a few months after U.S. President Donald Trump extending social distancing guidelines until the end of April but oversupply concerns remain elevated as tanks all over the world reach capacity, according to Edward Moya, senior market analyst, New York at OANDA.
Also in the U.S., Texas pipeline operators and shale producers are at a standoff while a state energy regulator has renewed his controversial call for mandated cuts to address a growing crude glut.
