Coronavirus, raw production developed

0
124


Oil prices fell nearly $ 1 a barrel on Monday as concern over the lingering glut and gloomy economic conditions caused by the coronavirus pandemic combined to cancel support for cutoffs in some of the world’s largest producers.

Brent crude futures fell 73 cents, or 2.4%, to $ 30.24 per barrel at 12:11 GMT, while US West Texas Intermediate crude futures fell by 81 cents, or 3.3%, at $ 23.93 per barrel.

Both benchmarks have seen gains in the past two weeks as countries eased trade and social restrictions to deal with coronavirus and demand for fuel rebounded slightly. Oil production around the world is also declining.

But possible signs of a second wave of coronavirus infections in northeast China and South Korea have worried investors as more and more countries have started to pivot towards easing restrictions pandemics in actions that could support demand for oil.

“They’ve removed some of the blockages, but does that mean the worst is over yet? Said Tony Nunan, senior risk manager at Mitsubishi Corp in Tokyo.

Global demand for oil has dropped by around 30% as the coronavirus pandemic has slowed movements around the world, creating global stocks.

“Oil companies are facing a plethora of challenges due to the sudden drop in demand,” GlobalData oil and gas analyst Haseeb Ahmed said in a note.

“North America is facing a severe shortage of storage capacity … it may only be a matter of time before the country (the United States) runs out of storage space. “

Fears that the United States would run out of storage space triggered the price of WTI in negative territory last month, prompting some US producers to cut production.

Sign of this impact, the number of oil and gas platforms in operation in the world’s largest oil producer fell to 74 during the week of May 8, a record level according to data released Friday by the company. Baker Hughes energy services since 1940..

“People are surprised at how quickly the United States stops production and that is exactly what we need to support prices,” said Nunan of Mitsubishi.

“There are still 10 days before the expiration of the June contract … if the WTI contract can avoid an expiring crash, we hope to have seen the bottom. “

LEAVE A REPLY

Please enter your comment!
Please enter your name here