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
Not only rapists.. Modi trying to protect all saffron major terrorists. anybody arguing that modi not tried to protect, then answer me for these -
Many saffron criminals convicted in terror and communal activity aquitted under modi rule.
Recenlty aseemananda aquitted in Mecca Masjid case, before aseemananda only revealed that he did such terror activities and now NIA found that no evidence...!
Aseemananda's many cases NIA closing one by one for giving complete clean chit
There are many incidents for NIA acting as a saffron tool
In Justice Loya murder case why Amit Shah not get arrested till now and they are making favourable condition by keeping saffron minded lawyers
If Modi and his bakths not the reason/responsible for the hike in numbers, then why modi scared of public? He came to power by boasting and public speeches, and after getting power he hardly faced public. And now he didnt speak on this shocking kathua rape inncident. And also at the same time he trying to protest those rapists.
It is baseless criticism that rapes are increasing under modi rule. Mr. Yogesh said the real reason behind this hue and cry after knowing the incident
One correction is there.. Under UPA rule rape issues were there much but not reported or complainted this much. Those issues are became unknown. Either girl hesitated to complain or there is no much evidence for that.
People and media not thinking about this and unwantedly blaming Modi rule
Every where rape issues.. Daily I am reading atleast 3 rape issues..
Add new comment