NEW DELHI: Global crude oil benchmark Brent on Wednesday saw prices plunge below the $16 per barrel level to its lowest in over two decades.While prices had recovered to $21 by 8.30 pm IST, concerns remain over whether Brent will follow WTI crude in going into negative territory.
Brent crude had fallen 24 per cent in the previous session and continued its headlong plunge on Wednesday too, touching a low of $15.98, a price not seen since June 1999. However, the expiry of the May contracts saw its WTI peer claw back some of its decimated value. While WTI had fallen to (-)$37.63 per barrel on Monday, the next two session have seen prices rise into positive territory. As of 8.40 pm IST, WTI was trading at $14.99 up by nearly 30 per cent compared to its previous close.
The Covid-19 pandemic and the sweeping global lockdowns following in its wake have destroyed crude oil demand to an unprecedented level. Since the beginning of this year, brent prices have fallen over 70 per cent from its 2020 peak of $68.91 in January and analysts believe the fall may continue as demand remains depressed and storage becomes scarce. According to the International Energy Agency, global oil demand is expected to fall by a record 9.3 million barrels per day (mbpd) year-on-year in 2020.
“The impact of containment measures in 187 countries and territories has been to bring mobility almost to a halt,” the agency said. In April alone, broad restrictions on movement and industries across the globe are expected to have resulted in an unprecedented 29 mbpd decline compared to a year ago.