Oil extended its slide on Monday, falling to the lowest in more than two decades, on concern the world is rapidly running out of places to store crude after output cuts proved insufficient to cope with plunging demand.
Moneyweb reports that futures in New York fell 15% to less than $16 a barrel after losing almost a fifth of their value last week as the deal by OPEC+ and other producers failed to counter the demand hit from a crippled global economy.
The current May contract expires on Tuesday, however, with the more active June futures falling by around a third as much on more than five times as much trading volume.
Buyers in Texas are offering as little as $2 a barrel for some oil streams, raising the possibility that American producers may soon have to pay customers to take crude off their hands.
Global benchmark Brent crude was only down around 1%.
Demand for oil has collapsed so much due to the coronavirus pandemic that facilities for storing crude are nearly full.
Benchmark U.S. crude oil for June delivery fell 12.9% to $21.69 per barrel, as factories and automobiles around the world remain idle.
Big oil producers have announced cutbacks in production in hopes of better balancing supplies with demand, but many analysts say it’s not enough.
Brent crude, the international standard, was down $1.78 to $26.30 per barrel in late Monday trade.
Big oil-producing countries have agreed to cut production to help balance supplies with demand, but many analysts say the cuts are not sharp enough to lift prices.
Its good news for the South African motorist with another big price already being predicted by the AA in May, following a drop in the price of petrol of close on R2 a litre at the beginning of April.
moneyweb/ANA/AP
