Oil slumps to record low since 2003

LONDON: With Brent North Sea crude plumbing a 17-year low owing to massive oversupply as the coronavirus crisis paralyses global demand, oil prices slumped anew on Friday

Brent for May delivery was down 7.33 per cent from Thursday, at $24.41 a barrel.

West Texas Intermediate fell 5.97 per cent to $21.25.

Oil has seen a price downlside in recent weeks on the back of collapsing demand, as COVID-19 slams the brakes on economic activity and the world´s appetite for energy.

Crude futures spiralled even lower this month after a fierce price war erupted between Riyadh and Moscow.

“The coronavirus pandemic is reducing oil demand,” wrote analysts at the Wood Mackenzie research consultancy in a note to clients.

The perfect storm has sent oil prices collapsing to their lowest levels in almost two decades, while also stretching global crude storage capacity.

“With Saudi Arabia attempting to flood the oil market by ramping up production to counter Russia, oil prices have halved this month … prompting countries to stockpile under the low prices,” said Sun Global Investments head Mihir Kapadia.

“Oil stockpiles around the world climbed up as major refineries in core markets such as China were shutdown due to the pandemic.

“According to industry reports oil storage levels globally have already reached 75 percent of capacity, and continued stockpiling under closed demand would crash the prices to $10 in the coming months unless industrial activity restarts.”