Global oil markets remained under intense pressure on Tuesday, with Brent crude dropping below $20 per barrel for the first time in 18 years while other major benchmarks across the world tumbled.
Brent, the international crude marker, slipped to $18.10, indicating that markets see no immediate let-up to the collapse in oil demand that sent some US oil benchmarks plunging under $0 for the first time on Monday, leaving producers paying for buyers to take their oil away while available storage is scarce.
Coronavirus has sent the oil sector into a state of crisis, with lockdowns implemented by authorities to smother the outbreak slashing demand for crude by as much as a third.
Contracts for the US benchmark West Texas Intermediate for delivery next month tumbled as low as minus $40 a barrel on Monday. Analysts at Citi warned that “if global storage worsens more quickly, Brent could chase WTI down to the bottom”.
The collapse in the May WTI contract was partly a technical product of the fact that it expires on Tuesday, meaning trading volumes were low and making the contract for June delivery more noteworthy, analysts said. That contract held above $20 a barrel on Monday but slid as much as 42 per cent on Tuesday to trade at lows of $11.79, suggesting the blowout in the May contract was more than a blip and that the entire global oil market faced challenges.
Goldman Sachs analysts said the June contact was likely to face downward pressure in the coming weeks, pointing to the “still unresolved market surplus”.
“As storage becomes saturated, price volatility will remain exceptionally high in coming weeks,” they said. “But with ultimately a finite amount of storage left to fill, production will soon need to fall sizeably to bring the market into balance, finally setting the stage for higher prices once demand gradually recovers.”
Warren Patterson, head of commodities strategy at ING, said it was likely that “storage this time next month will be even more of an issue, given the surplus environment”.
“And so in the absence of a meaningful demand recovery, negative prices could return for June,” he added.
European equities traded lower, partly dragged down by weaker energy stocks. The continent-wide Stoxx 600 was down 1.9 per cent, with its oil and gas sub-index dropping 3.3 per cent. In London the FTSE shed 1.7 per cent, while Frankfurt’s Dax slid 2.3 per cent.
Equities were also broadly lower in Asia, with futures tipping US stocks to fall 1 per cent when trading in New York begins later.
On Wall Street overnight, the S&P 500 closed down 1.8 per cent, partly because of weakness in energy shares, but also due to increased pessimism over the time it will take for countries to emerge from lockdowns.
In fixed income, the yield on the 10-year US Treasury fell 0.03 percentage points to 0.585 per cent as investors retreated to the safety of the debt.
Comments
If RSS and other chillar saffron pillas are banned....then all Muslim based parties will surely back off....try it
..India will be a Better place to live......
if u say to ban SDPI and PFI wht abt the killers who killed more thn 1000's of Muslim & Dalits in india who will ban those who killed this muslims & dalits they are nationlist this RSS VHP ABVP Sangi shld b banned first in india if you ban this guys thn india will b peace country y u all involving kerala in this in kerala they kill for political reason @mohan and @nirmal u mean to ban all the parties in kerala and in india thn only RSS will rule the country no it will never happen everyone hve rights in india dont point others b4 pointing others look into you wht you guys are upto thn point others for ban or anything wht RSS do notice tht firts insted saying to other parites
First RSS should be banned. Then automatically there wont be any problem, coz the root cause of all the hatred is from this organization.
Also Ban Praveen Poojary killers & thier organization like Bajarang dal , VHP , HJV and Gow rakshak sangs ! !
How about RSS involved in various terrorist activity....I am not a member of both parties....but who are these tapaories to ban....
Same way why don't they ask central govt to ban gang, which is involved in killing Udupi Praveen Poojary?
A new TWIST to hide the real CULPRITS who were caught few days back... We all know cheddis evil agenda ... We dont trust them anymore....
How many times you asked centre When RSS members were hacked to death in Kerala . multiple times in a year ........? that means LDF UDF Congress......CPM and other parties should be banned for killing RSS members ?
If it was possible . then long back would have done .......this is GOD's World .....No evil can claim as its own.......Wa jaa'a haqq wa zahakal bathil ...........Falsehood should persih ...as it is bound to perish .......
and remember RSS is not patriotic not Hindu Organization..........and who are you to ask centre ......BJP elected not to control but to maintain a country
cpm and BJP are in open war in kerala and killing each other , never find any wrong on them ... any govt ruled in India since 70 years never find any guilty on RSS , where as most of the reports pointed its direct hands and some times its ideology behind it ...
central govt may hurriedly take action , if anybody approach action against PFI , as they effortlessly working to ban ZAkir naik and his org.. and keen to ban triple talaq.
Ban Also the Killers of
Ghandhi
Dabolkar
Panesar
Karkera
Akhlaq
hahahahahaha, what are these guys upto, they kill their own members and point out other organization.
when go rakshak killed the bjp worker, why did you keep quiet, did u ask govt to ban go rakshak.
This clearly says their intention is communal hatred.
America enlisted RSS in one of the Biggest Terrorist organization. Assam123.com.
The agenda of banning PFI and SDPI already there since RSS is running the central govt. But its hard nuts crack.
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