At around 4 p.m. in Paris, a barrel of Brent North Sea crude for May delivery was worth $ 29.65 in London, down 1.33% from Monday’s close.
In New York, the American barrel of WTI for April lost 0.52%, to 28.55 dollars, erasing a good part of its gains from the start of the session.
The day before, Brent and WTI collapsed by 11% and 9.5% respectively, while general panic took hold of the markets. Since the start of the year, prices have been cut in half.
“The biggest demand shock in its history”
” Crude is facing the biggest demand shock in its history, due to the cessation of world trade due to the pandemic, and at the same time Saudi Arabia and Russia are drastically increasing supply in the goal of pushing other producers into bankruptcy Said Matt Weller of Gain Capital.
Despite a slight rebound during the Asian session, the combination of a ” massive increase “From the offer of OPEC members and a” complete collapse “Of the demand created on the market” the conditions that are the most downward one can imagine “Said Neil Wilson of Markets.com.
Consequence for consumers: the price drops at the pump.
Production explodes, demand collapses
Ryad and Moscow engaged in a price war after the failure of their negotiations at the beginning of March in Vienna at the time of the summit of the Organization of the Petroleum Exporting Countries (OPEC) and their allies, which initially aimed to fall, or at least maintain, the current level of black gold production.
At the same time, demand is decreasing due to the increasingly drastic restrictions aimed at fighting the coronavirus.
On Monday, the executive director of the International Energy Agency (IEA) Fatih Birol and the secretary general of OPEC, Mohammed Barkindo, had also expressed their fears of economic and social impacts ” major For oil producing countries, especially the most vulnerable, in the context of the current crisis.
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