US, WASHINGTON (ORDO NEWS) — Record crude prices fell sharply on Monday, with Brent crude falling to its lowest level since November 2002 as concerns over eroding demand due to the Corona pandemic and the threat of the Saudi-Russian price war threatened to flood the market with excess supplies.
Brent crude futures fell 5.8 percent, or $ 1.45, to $ 23.48 a barrel by 0623 GMT, after falling earlier to $ 23.03, the lowest level since November 2002.
US West Texas Intermediate crude futures fell by as much as $ 19.92, approaching the lowest level in 18 years and recorded earlier this month, and fell in the most recent transactions by 3.8 percent, or $ 0.82, to 20.69 a barrel.
“Central banks facilitate (monetary policy) and governments provide stimulus packages, but they are just supportive measures, not a radical remedy,” said Satoru Yoshida, a commodities analyst with Rakuten Securities.
“Until we see signs of an end to the epidemic, prices will remain under pressure and may drop to less than $ 20 a barrel,” he added.
Oil markets are severely affected by the deteriorating demand caused by the epidemic and the price war between Saudi Arabia and Russia, which is flooding the market with excess supplies.
A Saudi Energy Ministry official said on Friday that the kingdom was not in talks with Russia to balance oil markets despite growing pressure from Washington to stop the turmoil that has plunged prices by more than 60 percent this year.
With current forecasts for a decline in global demand 15 or 20 million barrels per day, a decrease of 20 percent from last year, analysts say that there will be a need for a massive reduction in production beyond what OPEC is doing.
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