The cost of may futures for WTI crude oil trading today has fallen by 20% and is now less than $15 per barrel. Bloomberg writes that this is a record low for the last 20 years.
The cost of June futures for Brent fell by only 4%.
The Agency says that the price of oil is falling on concerns that it will have nowhere to store in conditions of low demand. So, home buyers in Texas only offer $2 per barrel of oil, Bloomberg reported.
On April 16 the Organization of countries – exporters of oil (OPEC) predicted the strongest in the history of the fall of demand for oil in 2020 it will reach 6.8 million barrels per day, while only in April, demand collapses to 20 million barrels a day.
April 10 OPEC+ announced agreement to reduce the level of global oil production. The agreement was reached a month after the termination of the previous transaction that triggered a record drop in the price of raw materials. By 9 March the price of Brent crude oil has fallen by 30% – up to $33 per barrel, the biggest daily drop since 1991, when the war began in the Persian Gulf. On 30 March the price of Brent crude fell below $23 a barrel.
Despite the fact that OPEC+ signed a deal for a record decline in world oil production, the price of oil on April 13 have remained virtually unchanged. Market participants are concerned that declining oil production will be insufficient to compensate for the drop in demand for hydrocarbons because of the pandemic coronavirus and the related global economic crisis.
On the background of unsuccessful negotiations Saudi Arabia, Vinitsa in the failure of the deal Russia has decided “to join total price war” and increase production from 9 million to 12 million barrels per day. In addition, Riyadh has pushed Russian oil Urals on the European market, offering triple the supply of Arab Light grade with big discounts. This led to the fact that, as of 31 March, the price of Urals dropped to the lowest level since 1999 – $13 per barrel. As noted by “Radio Liberty”, the Urals in Europe became cheaper fuel.