Oil hits lowest this century as coronavirus crisis hammers demand

[snoop1130]

Oil hits lowest this century as coronavirus crisis hammers demand

By Alex Lawler

 

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

 

LONDON (Reuters) - 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.

 

A glut has been building since OPEC+, led by Saudi Arabia and Russia, failed to renew output cuts last month. OPEC+ agreed new curbs this month, but government lockdowns to contain the pandemic have cut fuel demand more steeply.

 

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.

 

U.S. West Texas Intermediate CLc1 was down 60 cents, or 5.2%, at $10.97.

 

“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.”

 

The falls follow two of the wildest days in the history of oil trading, with supply looking likely to outstrip demand for months to come. The nearby U.S. contract fell into negative territory for the first time ever on Monday.

 

“Be prepared for more surprises in this broken oil market,” said Rystad Energy’s head of oil markets, Bjornar Tonhaugen.

 

Brent’s low on Wednesday takes the price back to a time when OPEC was also tackling a supply glut and business and consumers were concerned - unnecessarily as it turned out - about the Millenium Bug affecting computers after the turn of the century.

 

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.

 

The U.S. government’s official supply report is due later on Wednesday.

 

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.

 

Producers are considering further steps. Saudi Arabia on Tuesday said that it was ready to take extra measures with other producers, though the next formal OPEC+ meeting is not until June.

 

In a development that raises doubt over a formal U.S. supply cut, two of three Texas regulators on Tuesday delayed a vote to force producers to curtail output, predicting the move would land the state in a legal minefield.

 

-- © Copyright Reuters 2020-04-22

 

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[Somewhere In Time]

2 hours ago, snoop1130 said:

“Demand is low, supply is high and storage is full.”

Unimaginable, really.  An amazing statement in these remarkable times!       

 

SIT

[Tug]

A very hard time in the oil patch on the bright side cleaner air and no fracking to harm our environment 

[spidermike007]

Oil prices have dropped to record low levels. Even with taxes taken into consideration, pump prices should be at least 20-30% lower than we see right now. PTT and the feds are making a fortune on this historic drop in oil prices.

 

Others, who saw this coming, have been making a fortune too. Though jobs will be lost, there will be very little sympathy for big oil, over this price drop. I also have no sympathy for the US airlines, who were price gouging to a ridiculous extent before all of this happened. Overall, it is a very good thing for the average consumer, and it is happening at just the right time. Much help is needed, as hundreds of millions of low to middle income people are getting crushed right now.

 

Once things open up, I would imagine travel might be quite cheap, for the first 6-12 months. 

[hotchilli]

19 hours ago, snoop1130 said:

LONDON (Reuters) - Oil slumped to less than $16 a barrel on Wednesday, hitting its lowest since 1999

Shame that's not reflected at the pump?

[RocketDog]

On 4/23/2020 at 1:57 PM, hotchilli said:

Shame that's not reflected at the pump?

It never has been so. Oil is bought on futures contracts and is sold at a price to reflect that, otherwise they would sell at a loss, hence no reason to sell. 

[Baerboxer]

23 hours ago, rhyddid said:

more C19, less oil ? means less pollution, no more Oil wars.... i start to like this Covid19, even if it was created in the US bio warfare lab in Maryland.

 

Any proof of your last assertion? 

 

If not I call you out for posting lies.

[thaibeachlovers]

On 4/23/2020 at 8:23 PM, rhyddid said:

more C19, less oil ? means less pollution, no more Oil wars.... i start to like this Covid19, even if it was created in the US bio warfare lab in Maryland.

Let's not forget that once lockdown ends people will start driving again. Not everyone is going to be reduced to poverty and have to live on marmite sandwiches.

From listening to talkback radio the thing most people miss is driving. The day after lockdown ends is not going to be a good day to be on the roads.

[frenetic]

 

On 4/23/2020 at 1:57 PM, hotchilli said:

Shame that's not reflected at the pump?

Of course the price of a barrel of oil is reflected at the pump. Anybody who buys knows that this is the case. It's just that the cost of a barrel of oil isn't the only factor in the cost. There's the small matter of refining for one thing. And even if you could pump crude directly into your automobile there would still be transport costs.

[gk10002000]

I know why the price dropped, it is because I bought $60,000 US of BP a few months ago at what I thought was a good price and solid dividend.  I collected one quarter's dividend, sold some covered calls and things were looking good.  Now it is down 30% on paper value.  I won't sell it though.  The USA demand will pick up as the summer time rolls around. 

[gk10002000]

On 4/23/2020 at 12:50 AM, spidermike007 said:

Oil prices have dropped to record low levels. Even with taxes taken into consideration, pump prices should be at least 20-30% lower than we see right now. PTT and the feds are making a fortune on this historic drop in oil prices.

 

Others, who saw this coming, have been making a fortune too. Though jobs will be lost, there will be very little sympathy for big oil, over this price drop. I also have no sympathy for the US airlines, who were price gouging to a ridiculous extent before all of this happened. Overall, it is a very good thing for the average consumer, and it is happening at just the right time. Much help is needed, as hundreds of millions of low to middle income people are getting crushed right now.

 

Once things open up, I would imagine travel might be quite cheap, for the first 6-12 months. 

I am paying less for gas per gallon for my car than I can remember,, well not entirely true as I started driving in 1973 and remember 29.9 cents per gallon at the Merit self serve gas station in East Providence Rhode Island!  Funny thing is on this contract job in New Jersey I am only 4 miles from work and  with the shutdowns, there is no traffic and literally only one redlight to stop at sometimes on the way to work, and no place to drive to or go to after work or on weekends, so I am not driving much, the grocery stores and take out food joints are on the way to and from work and I am putting like only $30 a month of gas in my SUV.

[spidermike007]

58 minutes ago, gk10002000 said:

I know why the price dropped, it is because I bought $60,000 US of BP a few months ago at what I thought was a good price and solid dividend.  I collected one quarter's dividend, sold some covered calls and things were looking good.  Now it is down 30% on paper value.  I won't sell it though.  The USA demand will pick up as the summer time rolls around. 

Not even close to being accurate. How many family vacations do you really think will happen this summer? How many Americans traveling to Paris? The only thing that will drive demand this summer will be more use of air conditioning. And most of those will be powered by power plants using a mix of renewables, coal, and some natural gas (38%). BP might tick up from it's current levels, but do not count on a big jump anytime soon. 

[gk10002000]

1 minute ago, spidermike007 said:

Not even close to being accurate. How many family vacations do you really think will happen this summer? How many Americans traveling to Paris? The only thing that will drive demand this summer will be more use of air conditioning. And most of those will be powered by power plants using a mix of renewables, coal, and some natural gas (38%). BP might tick up from it's current levels, but do not count on a big jump anytime soon. 

what do you know is accurate or not?  Your opinion is no more valid than anybody else's

[spidermike007]

2 minutes ago, gk10002000 said:

what do you know is accurate or not?  Your opinion is no more valid than anybody else's

You did not answer my questions. They are common sense questions. 

[Henryford]

On 4/23/2020 at 1:57 PM, hotchilli said:

Shame that's not reflected at the pump?

USA gas was dirt cheap even before the slump.

[gk10002000]

19 minutes ago, spidermike007 said:

You did not answer my questions. They are common sense questions. 

You are free to do what you want.  If you are so sure, are you going to invest in the downside?  Of course not.  Stop trolling and run along. 

[winslowsjardine]

46 minutes ago, gk10002000 said:

what do you know is accurate or not?  Your opinion is no more valid than anybody else's

Well, it does seem overwhelmingly likely that given the loss of income and the high unemployment that will prevail in summer, people will be less likely to spend on non essential activities.

[metisdead]

A conspiracy troll post and the replies have been removed. 

[hotchilli]

7 hours ago, Henryford said:

USA gas was dirt cheap even before the slump.

I'm not interested in USA, this is a Thai forum.

[metisdead]

1 minute ago, hotchilli said:

I'm not interested in USA, this is a Thai forum.

 

This topic is in the World News forum, and the World News is for topics not related to Thailand

[Bluespunk]

On 4/22/2020 at 2:09 PM, snoop1130 said:

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.”

 

My heart bleeds...

[Deli]

Thank you CHINA !

[thaibeachlovers]

On 4/26/2020 at 9:48 PM, hotchilli said:

I'm not interested in USA, this is a Thai forum.

5555555555555

Have you looked at which sub forum you have posted that in?