The global pandemic, Coronavirus, has affected more than 180 countries with more than 2.4 million cases. The global death toll has crossed 169,000 and is still on the rise. The most affected countries are the United States(784,326), Spain(200,210),Italy(181,228) and France(156,480).
The world witnessed one of the most significant slips in the price of oil prices. The price of crude oil in the US went as low as zero dollars. Unbelievable, right?
After a gradual increase, finally, the costs of the oil recovered on Tuesday.
Demand and price of oil:
The US West Texas crude for May delivery was up to $39 in a fragile trade line of $1.37 a barrel.
The May contract expires on Tuesday, and the June contract may be more active as the contract rose 96 cents. This is an approximate increase of 4.7 percent.
The Global Benchmark crude trade for June was down by approximately 20 cents at just $25.37 per barrel.
The crude oil prices have fallen due to the imposition of the nationwide Lockdown in several countries. As this also restricted travel, the demand for oil went down. This pandemic has curved fuel use globally.
The storage space of oil is approximately full as the US storage hub in Oklahoma is now almost filled and is expected to fill up within a few weeks.
As the demand has reduced, the president of the United States, Donald Trump, said that the administration might halt the import of oil from Saudi Arabia soon.
After witnessing all of this, the Organization of the Petroleum Exporting Countries has agreed to cut the daily output of crude oil by approximately 9.7 million barrels per day. But, this will get implemented after May as the sudden decrease in the manufacturing might affect the stock market.
The supply of the oil is expected to tighten by July as storing the crude oil is a bit difficult now. The prices of the oil expected to decrease further in the next four weeks due to less demand. The inventories scheduled to increase by 16 million barrels by April 25th, according to research.
The American Petroleum Institute is planning to release crucial data related to the prices at 4:30 PM on Tuesday. A weekly report is also due to the US Energy Information Administration.
