Pandemic has sent oil prices to multi-year lows

on Tuesday, the grade of WTI crude oil sank to multi-year lows, breaking the mark of $27 per barrel and losing more than 6%. Minimum level, which was reached during the day North sea Brent — $28,40 per barrel. Such low prices was not January 2016. By 6:45 GMT prices, however, are clearly retreated: Brent played about 1.2% and crude fell half a percent. However, the situation remains extremely fragile, notes CNBC.

the market weighs several factors. First, of course, is the pandemic coronavirus. More and more countries closed the border, in an effort to prevent the spread of the epidemic, airlines canceled flights, broken, and others in the transport chain. As a result, the demand for fuel falls, and with it the oil.

the Second factor exerting the strongest pressure on the market — price war in the oil market, unleashed by Saudi Arabia after the parties to the agreement OPEC+ failed to agree on its extension.

“the Market will soon realize that in April, he could face one of the largest excess supply in the history of the modern oil market,” said Bjornar of Tongeren from Rystad Energy.

However, while Riyadh has postponed its plans for a sharp increase in production from April to may. But he stressed that quotes at $30 per barrel it is quite satisfied.

the flames were fanned the statement of the President of the United States Donald trump of an increased risk of a US recession due to the slowdown in economic activity globally and the fall in the stock markets.

While Washington has said it will use the oil sale to replenish its strategic reserve (SPR). Other countries, according to CNBC also plan to fill their tanks, black gold, since it is so fell.

However, they would not pay: analysts assess the prospects of realizing the promise of the Saudis to increase production to 12 million barrels per day.

“If the announced increase in the production of deitivity will take place, price risk further fall to the level of 20 dollars,” — said Commerzbank analyst Carsten Fritsch.