Prices Of Oil Plummets For A Second Day Due To The Outbreak Of Covid-19

News-CIF-updated


Prices of oil have been sharply weakened or declined due to a combination of events which triggered due to a collapse in global demand amid the coronavirus outbreak. This has been witnessed the day after the price of West Texas Intermediate, which is the benchmark of US oil, fell for the first time ever below zero.

The knock-on effect can be witnessed as a supply glut and also due to a worldwide shortage of storage space for oil. On Tuesday, an unscheduled conference call was done by energy ministers from the Opec and also the other major countries that produce oil, in order to discuss about the collapse, but did not agree upon any new measures to stop the supplies of oil.

As Covid-19 hits the energy demand across the countries, the price of a barrel of Brent Crude has plunged down for a second day. A trader said that, due to the crunch in physical demand for the products of crude such as petrol, jet fuel etc.  The storage hubs are at its full capacity i.e. they are close to their brim. The storage at US oil hub Cushing has already crossed 15 million barrels in the last month and soon it is expected to be at capacity for the first time ever.
Simon Williams, RAC fuel spokesperson said that, petrol prices could plummet below $1 per litre if the lower wholesale costs were being reflected at the pumps. Also, at the same time, there are a minimal number of people who drive very few miles and hence they are selling lower quantities of diesel and petrol for the time being, he said.