The global economic slowdown has caused oil prices to fall to the lowest since 2002, with Brent crude sliding more than 7% on Monday to just $22 a barrel. The oil industry is facing its largest demand drop in its history.
US crude benchmark West Texas Intermediate (WTI) hit a low of $19 per barrel overnight, before picking up slightly to over $20 per barrel as of 11:50 GMT.
Oil prices have tanked by more than half in the past month, with companies cutting back and closing production as a result of the COVID-19 pandemic, combined with the OPEC+ disagreement over production cuts.
Traders expect global surplus to approach 25 million barrels a day next month, which could overwhelm storage capacity worldwide within weeks.
Oil prices have been tumbling since the beginning of this month, as the OPEC+ nations failed to agree on production cuts, and Saudi Arabia threatened to flood the market with oil.
On Saturday, the head of the Russian Direct Investment Fund (RDIF) Kirill Dmitriev said that a new agreement to stabilize oil markets is possible if more nations support the initiative.
He told Reuters that the Corona-virus pandemic has become a “perfect storm” to trigger a new global financial crisis that will result in a recession.
To offset the economic fallout of the outbreak, countries should come together, including in imposing new output curbs to end the oil market turbulence.
RT. com / ABC Flash Point News 2020.