Oil prices plunged on Monday to their lowest levels in eighteen years, below $20 per barrel, as the coronavirus pandemic continues to cripple global oil demand with no signs of Saudi Arabia backing down on its promised supply surge.
At 11:25 a.m. EDT on Monday, WTI Crude had plunged to the $20 mark—and traded at $20.29, down by 5.67 percent on the day. Brent Crude prices had tumbled below $26—at $25.71, down by 8.01 percent today. Oil prices have lost more than 60 percent so far this year and hit on Monday their lowest level since 2002 as travel restrictions and lockdowns in major economies wipe out millions of barrels of oil per day of global oil demand.
Analysts and market participants are currently anticipating an oil demand collapse of around 20 million bpd in April, but it’s anyone’s guess now how long lockdowns and travel restrictions will remain in place, so the toll on oil demand could be higher.
While demand is plunging, there are no signs that the world’s top oil exporter and OPEC’s top producer and leader, Saudi Arabia, would back down from the oil price war it started earlier this month. The Saudis continue to signal an aggressive supply surge amid heavily depressed global demand, with another statement out on Monday to additionally roil the market.
“[T]he Kingdom intends to increase its crude oil exports, starting from May, by about 600 thousand barrels per day, bringing the total of Saudi petroleum exports to 10.6 million barrels per day,” an official at the Saudi Arabian Energy Ministry said on Monday, as carried by the official Saudi Press Agency.
On Friday, a Saudi Arabian official denied to Reuters reports that the Kingdom was in contact with Russia about potential talks to reach some kind of deal to influence the oil prices.
According to analysts, any talks or even a deal to support the market will be futile right now, considering the huge demand destruction.
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