Oil barrel prices had started the day at $15 but have plummeted over recent hours in a move that couled threaten an entire decade of growth, slashing thousands of jobs and wiping out hundreds of billions of dollars from company valuations.
Michael Tran, managing director of global energy strategy at RBC Capital Markets, had earlier said: “There is little to prevent the physical market from the further acute downside path over the near term.
“Refiners are rejecting barrels at a historic pace and with U.S. storage levels sprinting to the brim, market forces will inflict further pain until either we hit rock bottom, or COVID clears, whichever comes first, but it looks like the former.”
Prices have plummeted by more than 90 percent already this year, compounding impacts from the coronavirus pandemic.
The dramatic downwards trajectory illustrates just hoe oversupplied the US oil market has become with industrial and economic activities currently at a standstill.
Governments across dozens of countries throughout the world are extending lockdowns in a desperate attemot to slow the spread of coronavirus.
The world continues to struggle to bring the killer outbreak under control and with producers continuing to pump, a huge fire-sale has erpted among tradrs who don’t have access to storage.
Buyers in Texas had been offering as little as $2 a barrel for some oil streams while in New York, West Texas Intermediate dropped to $5.48 a barrel at 1:06 pm local time. Brent declined 5.8 percent to $26.44.
The huge oil price plunge has sent US stocks crashing following a strong two-week rally, with investors increasingly cautious over what is expected to be a disappointing week for earnings and economic data.
Energy stocks lost 1.9 percent in value and were on track for their sixth slide in seven sessions as the May US West Texas Intermediate (WTI) contract plummeted by more than half to its lowest price on record.
This is a breaking story. More to follow…
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