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.
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I do not know why media is making some big issues. Most of us have many FB accounts, Email Ids. This is not like Aadhar or Passport where it is the identity. Even in US, I know many senators having many FB accounts. They cannot share their personal details on FB so they have personal, political and regular friends.
Its not your fault. Politics isn't your cup of tea. It is something that is beyond your abilities! Sumne acting madkond iddidre yeshto chennagittu alva? Why on earth do you need all this? Is it worth?
...she just wanted to follow Kejribhai and thought abusing Modi would be a good idea...poor thing paid for it....the way it looks spandana will now onwards beat slower and more sensibly...
When will Ramya make public her smart strategy to take over Nehru dynasty to become all-powerful in Congress party and announce her secret master-stroke engagement to Rahu ?
I like her witty tweet and proud of her success she achieved at young age. She is more smart courage than feku supporter stone aged most superstious backward mindset RSS criminals (especially pucking uneducated ignorant brainwashed male and from mangalore chaddi taliban region) from karnataka. Best part, she doesn't give rats to 1000s of hate, abuse message from 3rd class chaddi criminals. RSS
criminal hurt by fact! RAT that how smart Ramya treat trolls on her facebook and twitter. you low life coward chaddi criminals can intimate her with her and demolishing comments? get a life
manipulating videos is the history of Brahmin Bania Jumla Party! They did it in JNU, they did with Hardik Patel, they might have done now, they will continue doing always
ತಾಯಿ ರಮ್ಯಾ ದೇವಿ ! ಎಷ್ಟು ಶತದಡ್ಡಿ ಇದ್ದೀಯಮ್ಮಾ ನೀನು !? ಅಯ್ಯೋ ಪೆದ್ದಿ, ಮುಂದೆ election ಗೆಲ್ಬೇಕು ಅಂತ ಇದೇಯೋ ಅಥವಾ ಪಪ್ಪು ಆಗ್ಲೇ ರಾಜ್ಯಸಭೆ seat ready ಇಟ್ಟಿದಾನೋ?
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