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
Dr Zakir naik' s naik controversy is bound to happen due to his increasing popularity around the world for spreading peace. Our hypocrite politicians and news channels and their blatant liars like Arnab goswamy do not want peace makers in the society as it wont help them to accomplish their agenda. Dr Zakir naik never breaks any law of the land and always preached the truth.. Quran is the only religious book which specifically and strongly condems killings of innocent people. Dr Naik will have the help of Allah no matter how hard the media tries to malign his name. May Allah be with you Dr Zakir bhai and all Muslims. Ameen.
Bopanna, if you are real hindu, and against these muslims, how you can work in muslim country? By working there you are helping these People. So resign immediately and come back to india. Let us see your real Hinduism. For the money you will do everything this is the fact. If you don't resign then don't blame them. Instead accept their religion and live with them.
Mr.Bopanna.... please be careful on what you comment.. know the facts and provide sources before spitting out sensitive words...
Islam exists for more than 1400 years and terrorists less than 50 yearsss, if Holy Quran teaches to kill Kuffars as you say then I am surprised that not 1% of the world's killings is done by Islam....
There are more than 2 billion muslims in the world and is 30% of the worlds population.... if we all muslims become terrorists then jerks like you would have vanished in minutes... but no, our religion doesn't teach that.... no where we are thought in Quran to kill kafirs or non muslims than helping them....
IF ISIS, daesh or any terrorists organisation u label them as muslims, then u are ignorant, illiterate and an idiot.... can u not see the recent blast in baghdad killed more than 220 muslims, turkey more than 40, Ksa recently.... how an earth a terrorist can kill muslims if his target is kuffars....are the terrorists idiots enough to make out the difference is religion....Terrorists has no religion and ISIS,Daes or any group of idiots are not a part of our holy religion which promotes peace....not killings
Non muslims are just scared of ZN coz of the conversion ratios of non muslims into Islam....I doubt any of his videos have thought or inspired any one to become a terrorists... none of them I have seen... If he is then I will never be his supporter but if he is not then please dont comment unnecessary things in social media.... without a valid source....
Surprisingly u seems to be a reisdent of KSA.... how on earth with somuch hatredness within yourself can work in a muslim country abiding all muslim laws... and enjoy the incomes of muslim ruled companies, Money changed ur mind and developed tolerance with u... lol...
Brothers... dont blindly believe media as most of the storie are fabricated.. there is story behind what media portrays... Islam is never a religion of killing but a religion which promotes peace and condemns killing....
i strongly beleave this game is being played by sri sri ravi shanker... he was bashed black and blue(exposed) by dr zakir some years back in frount of a very larg croud and whole world came to no about his truth that he is nothing but just a fake god man.... am very sure when dr zakir nayaks isseue goes to the cort he will come clean.... its just that people cant defeate his through debates so they r using all other means to defame him... sri sri if u r a man (whuch i dought) defeate him by debating him not like this.....
All critics of ZN should watch his video preach.
They should compare these with other hate mongers speech can realize who is who?
Asatyameva Jayate, yes you are a terrorist no doubt. All Muslims are terrorists since they abide by the Koran - which asks to kill all Kuffars. Koran shuld be banned and all Muslims Jailed
Every Hindu or Muslim once took a oath in school......... every Indians are my brothers and sisters..... if one of them become terrorist can we arrest the whole nation as their relatives.....ha ha.....
If a rapist or a terrorist is inspired by any god book religion or any person are you going to ban or arrest them all......joke hai yaar.............
I am inspired by dr. Zakir Naik and also some good words from some Hindu purohits. Am I going to be a terrorist???
Indresh Kumar's Sufism more active in Bangladesh....!
Does India ever taken against Indresh Kumar who accused in Samjoutha Express and Pakistan asks us to take action against him? Why much eagerness in what Bangladesh's baseless demand?
Those who can't face ZN on talk or debate, obviously they go for backdoor to defame ZN. Modi's popularity going down in day by day and also UP elections ahead, so this 'inspire' story has more depth to divert people's attention. RSS pracharak and terror accused Indresh kumar founded modern Sufism and using the same Sufism against Islam. US did the same in Iraq, Libya, Syria, Pakistan, Afghanistan to destroy Islam by 'Muslims'. Muslims are scapegoat of divide and rule either by western country or India.
Some so called our scholars also knowingly or unknowingly victim of Sufism to defame Islam and against ZN.
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