On Thursday, oil prices fell to a multi-year low, and WTI crude oil prices remained at around $ 20 a barrel. The terrible warning of a demand shock caused by the virus cast a shadow on the production cut agreement.
US benchmark West Texas Intermediate crude oil rose slightly in Asian midday trading to US $ 20.05 per barrel. It fell below the $ 20 mark on Wednesday and hit its lowest price in 18 years.
The international benchmark Brent crude also rose 0.5% to US $ 28.12 per barrel.
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As the coronavirus pandemic weakened global demand, prices plunged, and the price war between OPEC ’s main force, Saudi Arabia, and non-OPEC competitor Russia caused oversupply and made the situation worse.
Riyadh, Moscow and other crude oil producers finalized a compromise over the weekend to cut daily production by about 10 million barrels, which briefly boosted prices, but the gains soon disappeared.
Investors worry that due to oversupply, global storage capacity is declining, and the agreement is not enough to offset large losses in demand.
What worries traders is that the International Energy Agency (IEA) said on Wednesday that 2020 may be the industry ’s “worst year in history”.
The IEA said in its latest monthly report that overall, demand will fall by 9.3 million barrels per day in 2020, which was 29mbd lower than the same period last year in April alone, reaching its highest level in 1995.
However, Stephen Innes, chief global market strategist at AxiCorp, said that the market received some support in Asian trade on Thursday because it “tends to increase OPEC + production cuts, and G20 producing countries’ responses are also more confident, to Avoid further decline in oil prices. Oil. “