Oil prices have peaked since the turn of the century due to falling demand

US, WASHINGTON (ORDO NEWS) — Oil prices fell below $ 16 a barrel on Wednesday, peaking since 1999, due to market oversupply and a collapse in demand amid the economic impact of the coronavirus pandemic.

The surplus of raw materials began to grow after the OPEC + group, led by Saudi Arabia and Russia, was unable to extend the agreement to reduce production in March. In April, the group agreed on a new pact, but quarantine measures to contain the pandemic led to a sharp reduction in fuel demand.

Futures for Brent crude oil, which fell 24% in the previous session, reached $ 15.98 per barrel, the lowest since June 1999. By 13:10 UTC, Brent was trading at $ 18.93.

Futures on WTI fell 3.4% to $ 11.18.

“Be prepared for new surprises in this broken oil market,” said Rystad Energy’s Björnar Tonhaugen, adding that prices could drop to unprecedented levels because storage would simply not be enough if there was no further reduction in production.

US oil inventories rose 13.2 million barrels for the week ending April 17, the American Petroleum Institute said on Tuesday. Analysts had forecast growth of 13.1 million barrels.

Government data on stocks will be released at 17.30 UTC.

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