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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Here every one had a mistake. No one not ready to take their responsibility. So we no need to blame any one. The only one solution to stop the accident the government would install radar to every 5KM gap on each corner of the raod with camera (as it is in Saudi Arabia) with maximum speed of 40K.M. per hour. If they crosses this speed they will be penalty of Rs.200/- minimum. If this is done definitely accident will slow down soon and every rider will be safe. But government will cost more once.
Think this traffic department to install and fix the device in every corner of the road.
Road Accident is a serious issue. Daily hundreds killed because of it in India. But unfortunately nobody ( both govt and public) doesn't take this matter seriously..
why we should have a car which has speed of more than 80km per hour. Better late than never...
Oh Gov't.., do something for the sake of innocents life which you can.....
Inna LIllahi Wa Inna Ilahi Rajoon!
Motor bike is not at all good for mangalore roads....it is a kind of death trap...traffic is increasing day by day...no space for small vehicles to move around...at the same time big truck entering from nowhere...overall this kind of accidents are invited every now and then...so tragic...we need to ban motor bikes...most of young boys and couples are getting killed...so sad...
Inna lillahi vainna ilaihi rajihoon, O Allah forgive them and make good here after to them
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