Oil Drops to Its Lowest Price in 17 Years

Reuters

As the Coronavirus continues to devastate the world economy, oil finds itself the next victim as it reaches its lowest prices in 17 years. According to NNA, US benchmark West Texas Intermediate fell 5.3% now, trading at $20 per barrel, and the international benchmark Brent crude fell 6.3% at $23.

This came after the death toll of the virus reached 36,912 deaths worldwide, according to worldometers as of the time of writing. Lockdowns and restrictions implemented worldwide to fight the virus have taken their toll on the demand for oil, which resulted in a decrease in prices.

This is also compounded by the increasing supply of oil as Russia and reportedly engage a price war after a row over if they should cut output to support prices.

As of the end of last week, Riyadh had not been in contact with Moscow about potential output cuts. Also, Russia’s deputy energy minister remarked that $25 per barrel was not a catastrophe for the country’s producers.

Vivek Dhar, a commodities analyst at Commonwealth Bank of , told Bloomberg News, “Demand concerns are critical but well known. What really took the market down were the signals we got from and Russia that they intend to continue their current path.”

Prices are expected to fall even further as storage tanks around the world are set to reach full capacity.

“When the storage capacity is filled, we should probably expect a response from , Russia, and other essential oil producers,” AxiCorp’s Stephen Innes said.

Innes further warned that the “longer their response takes, the higher the risk of another steep decline in oil prices.”

There is, of course, the burning question of what this means for , which began exploring its oil reserves last month. As the prices and demand for oil begin to dip worldwide, how will benefit from their newly discovered oil reserves after so late in the game?

We have a dedicated coronavirus section where you can find the latest news/updates about the pandemic in , inform yourself with WHO-verified resources, and track the number of cases in in real-time. Click here.


Our team works tirelessly to ensure Lebanese people have a reliable alternative to the politically-backed media outlets with their heavily-funded and dangerous propaganda machines. We've been detained, faced nonstop cyber attacks, censorship, attempted kidnapping, physical intimidation, and frivolous lawsuits draining our resources. Financial support from our readers keeps us fighting on your behalf. If you are financially able, please consider supporting The961's work. Support The961. Make a contribution now.