20°C / 22°C
  • Tue
  • 25°C
  • 16°C
  • Wed
  • 26°C
  • 14°C
  • Thu
  • 17°C
  • 13°C
  • Fri
  • 14°C
  • 11°C
  • Sat
  • 15°C
  • 11°C
  • Tue
  • 21°C
  • 16°C
  • Wed
  • 26°C
  • 15°C
  • Thu
  • 27°C
  • 16°C
  • Fri
  • 30°C
  • 18°C
  • Sat
  • 28°C
  • 19°C
  • Wed
  • 28°C
  • 16°C
  • Thu
  • 22°C
  • 15°C
  • Fri
  • 18°C
  • 13°C
  • Sat
  • 22°C
  • 14°C
  • Sun
  • 27°C
  • 14°C
  • Wed
  • 27°C
  • 13°C
  • Thu
  • 17°C
  • 12°C
  • Fri
  • 15°C
  • 11°C
  • Sat
  • 17°C
  • 11°C
  • Wed
  • 24°C
  • 20°C
  • Thu
  • 22°C
  • 19°C
  • Fri
  • 23°C
  • 18°C
  • Sat
  • 27°C
  • 19°C
  • Wed
  • 19°C
  • 15°C
  • Thu
  • 22°C
  • 15°C
  • Fri
  • 24°C
  • 17°C
  • Sat
  • 26°C
  • 18°C
  • Sun
  • 21°C
  • 16°C
  • Wed
  • 22°C
  • 14°C
  • Thu
  • 28°C
  • 13°C
  • Fri
  • 34°C
  • 14°C
  • Sat
  • 36°C
  • 17°C
  • Wed
  • 25°C
  • 15°C
  • Thu
  • 29°C
  • 16°C
  • Fri
  • 32°C
  • 18°C
  • Sat
  • 31°C
  • 18°C
  • Tue
  • 29°C
  • 19°C
  • Wed
  • 31°C
  • 17°C
  • Thu
  • 21°C
  • 15°C
  • Fri
  • 17°C
  • 14°C
  • Sat
  • 19°C
  • 13°C
  • Wed
  • 25°C
  • 13°C
  • Thu
  • 24°C
  • 12°C
  • Fri
  • 24°C
  • 12°C
  • Sat
  • 23°C
  • 12°C
  • Wed
  • 26°C
  • 16°C
  • Thu
  • 22°C
  • 15°C
  • Fri
  • 25°C
  • 15°C
  • Sat
  • 18°C
  • 14°C
  • Wed
  • 19°C
  • 14°C
  • Thu
  • 20°C
  • 14°C
  • Fri
  • 23°C
  • 16°C
  • Sat
  • 29°C
  • 19°C

Oil prices extend losses on price war, virus fallout

Last week's price war began after Saudi Arabia and other members of an informal alliance of major crude producers led by the OPEC oil cartel pushed for an output cut to combat the impact of the virus outbreak.

Picture: Freeimages.com

SINGAPORE, Singapore - Oil prices extended the gloom on Monday after a Saudi-Russian price war and an equities meltdown sparked by the coronavirus pandemic saw their biggest weekly losses in more than a decade.

US benchmark West Texas Intermediate (WTI) briefly fell below $30 a barrel, or 5.5%, in morning Asian trade before regaining its footing.

It was trading at $31.13 a barrel at around 0530 GMT, down nearly two percent from Friday's close.

The Brent global benchmark was down 3.28% at $32.74 a barrel.

Last week's price war began after Saudi Arabia and other members of an informal alliance of major crude producers led by the OPEC oil cartel pushed for an output cut to combat the impact of the virus outbreak.

But alliance partner and non-OPEC member Russia, the world's second-biggest oil producer, refused -- prompting Riyadh to drive through massive price cuts and pledge to boost production.

The COVID-19 outbreak added to downward pressure as it throttled global equities, with growing concerns over a potential worldwide recession and escalating travel restrictions prompting a crash in demand forecasts.

Prices made a feeble rally late last week after US President Donald Trump announced $50 billion in Federal spending to stem the damage from the coronavirus and plans to buy "large quantities of crude oil" to top up strategic reserves.

But both benchmarks still fell by around 25% in the biggest weekly drop since the global financial crisis in 2008, and more losses are expected.

"Rallies will likely continue to fade so long as the market continues to weigh the double-whammy of the COVID-19... and the massive jump in supply," said Stephen Innes, global chief markets strategist at AxiCorp.

"The rare combination of severe shocks to both supply and demand has caused the crude market to collapse as producers... steel themselves for an unexpected glut of oil in coming weeks," added Sukrit Vijayakar of Trifecta Consultants.

Comments

EWN welcomes all comments that are constructive, contribute to discussions in a meaningful manner and take stories forward.

However, we will NOT condone the following:

- Racism (including offensive comments based on ethnicity and nationality)
- Sexism
- Homophobia
- Religious intolerance
- Cyber bullying
- Hate speech
- Derogatory language
- Comments inciting violence.

We ask that your comments remain relevant to the articles they appear on and do not include general banter or conversation as this dilutes the effectiveness of the comments section.

We strive to make the EWN community a safe and welcoming space for all.

EWN reserves the right to: 1) remove any comments that do not follow the above guidelines; and, 2) ban users who repeatedly infringe the rules.

Should you find any comments upsetting or offensive you can also flag them and we will assess it against our guidelines.

EWN is constantly reviewing its comments policy in order to create an environment conducive to constructive conversations.

comments powered by Disqus