Oil slumped to less than $16 a barrel on Wednesday, hitting its lowest since 1999, with the market awash with excess supply as the economic fallout from the coronavirus pandemic hammers demand for fuels.
FILE PHOTO: A muddy run-off splashes beside an oil rig belonging to Zion Oil and Gas in Karkur, northern Israel October 17, 2010. ISRAEL-GAS/ REUTERS/Nir Elias/File Photo
Brent crude LCOc1, which fell 24% in the previous session, touched $15.98 a barrel, its lowest since June 1999. It was trading down 62 cents, or 3.2%, at $18.71 by 0950 GMT.“The oil market is in deep trouble and is unlikely to shake off its malaise any time soon,” said Stephen Brennock of oil broker PVM. “Demand is low, supply is high and storage is full.”
“Be prepared for more surprises in this broken oil market,” said Rystad Energy’s head of oil markets, Bjornar Tonhaugen. In the latest sign of excess supply, the American Petroleum Institute on Tuesday reported that U.S. crude inventories rose by 13.2 million barrels, against analyst expectations for an increase of 13.1 million barrels.In an effort to shore up the market, OPEC+ this month agreed to reduce output by 9.7 million bpd. Other nations, including the United States, have also said they will pump less.
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