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.
He was hospitalized on the previous day after he suddenly took ill.
Comments
No words to speak after hearing the sad demise my favorate Mr. P.C.M. Kunhi. I met him last year in the month of April 2015 on my vacation in a programme. He spoke to me and asked about my wishes. Great Educationist, Academist, Philanthropist and wise man.
Helping hand for poor. I was with him in Yenepoya Dental College at Zulekha Complex, Bunder.
May Allah bestow him Jannathul Firdouse and Give him a cool and heavenly life in Barzak.
Aameen Ya Rabbul Aalameen..
Innaa Lillahi Wa Innaa llaihi Raajivoon. May the departed soul rest in peace. May Allah accept all his good deeds and forgive the sins. May Allah bless him with Jannah. May Allah give sabr ( patience ) to the grieved family to bear the loss of their dear one.
Heartfelt condolences.
our deepest condolences to the family members of pc kunhi,
we pray with almighty Allah give patience and strength to the nearest and dearest of all his family members, this is a great loss to all of us, once again we pray for the magfirah of departed soul of kind and soft man. Ameen
to Allah we belong and to Him is our return
our heartfelt condolences to the family members of pc kunhi . may Allah give patience, strength to all his nearest and dearest, the great loss of our family, my deepest condolence to all of them,
we once again pray with almighty for the maghfirah of departed soul of kind and soft man, ameen
Please accept our deepest condolences, \to Allah we belong and to Him is our return\""
Inna Lillahi wa Inna Ilahi Rajiwoon. Very sad and shocking news. We are with the aggrieved family
Inna Lillahi wa Inna Ilaihi Rajioon. May Allah grant him jannah. Indeed he was a great motivator. Hope his son Hashir will fulfill dreams of his father.
A great loss to the community and society. He was a role model for many. Despite his ill health he continued to fulfill his responsibilities.
Inna lillahi wa inna ilaihi raajioun. May Almighty Allah bestow with Jannathul Firdouse. A big loss to entire coastal muslims as well as for Islamic Academy of Education (Yenepoya University).
INNA LILLAHI WA INNA ILAIHI RAAJIOON.
The big loss for Muslim Community. He was the Correspondent of Badria College for decades.
May Almighty ALLAH bless him with Jannathul Firdous.
Inna Lillahi Wa inna ilaahi rajioon
The Great Academician, Educationist, Administrator,Philanthropist. the really big loss for the society, we wish him to take rebirth.
RIP, condolences to the family and loved ones.
RIP sir
wanaqalat shaqqana
unbelievable...really really hard to believe
Unbearable loss to the society “RIP”
Inna Lillahi Va Inna Ilaihi Raajivoon...
Inna Lillahi wa Inna Ilaihi Rajihoon. Allahummghfirlahoo warhamhoo whafu anhoo Yaa Rabbal Aalameen. May Almighty Allah bestow him with the Janathul Firdouse. ameen.
Inna lillahi wa inna ilayhi raji'un
inna lillahi wa inna ilaihi raajioun. we pray almighty allah to bless late.prof.p.c.m.kunhi, with his jannathul firdouse, aameen. our heartfelt condolences to the family members of prof.p.c.m.kunhi. may almighty allah give patience, strength and forbearance to all his family members to bear the brunt of bereavement. a soft spoken, well qualified civil engineer, educationist., academician and also an entrepreneur with humility. a very good footballer and a keen sportsman in his heydays. prof.p.c.m.kunhi, is closely known to us for the past 40+years., since his teaching days in krec-surathkal (now-nitk). particularly mangalore muslim community and others have lost a decent gentleman with high esteem. we once again pray with almighty allah for the maghfirah of the departed soul of this noble gentleman, aameen.
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