US oil prices have fallen to their lowest level in more than two decades. Demand for oil has been decreased from Coronavirus pandemic has increased fears that the world is being covered in crude oil’s that it does not have enough space to store.
Crude oil prices plummeted sharply on Monday to its lowest since 1999, ever-decreasing demand for Crude oil, and fears that US oil’s storage facilities would quickly reach the brim in the middle of the Coronavirus pandemic.
According to the experts, the latest fall in the prices of Crude oil will put pressure on the producers to further decrease their supply.
The oil market has been under pressure as a result of estimates from the Organization of Petroleum Exporting Countries (OPEC) and the International Energy Agency on low fuel demand and bleak predictions.
The front-month May WTI contract CLc1 was down $2.62, or 14%, to $15.65 a barrel by 01: 42 GMT. At one point, the contract had fallen as much as 21% to hit a low of $14.47 a barrel, the lowest since March 1999.
It has been predicted by Saudi officials that total global supply cuts from oil producers could amount to nearly 20 million bpd, but that includes voluntary cuts from countries like the United States and Canada, which cannot simply turn on or off production in the same way as most OPEC nations.
Cut in oil production from OPEC and its allies such as Russia will also start from May. It has been agreed by OPEC and its allies to reduce output by 9.7 million bpd to stem a growing supply glut after stay-at-home orders and business furloughs to curb the COVID-19 pandemic that has taken lives of more than 164,000 people worldwide to sap fuel demand.