Oil prices fell again on Monday, having fallen for a month straight now, and having given up about 60 percent since the start of the year as the coronavirus continues to ravage the globe, slowing the consumption of oil.
While West Texas Intermediate had dropped precipitously, reaching nearly $20 a barrel, it quickly bounced back toward $30, before plummeting again in the wake of coronavirus panic. Brent crude futures fell $1.09, or 4 percent, to $25.89 a barrel. WTI crude futures were down below $22 a barrel again, closing above $23.
The coronavirus, which has infected more than 325,000 and killed over 14,000 worldwide, has ravaged business, travel and daily life. Many oil companies have rushed to slash spending and some producers have already begun releasing employees.
Saudi Arabia and Russia remain locked in a price war, which is drastically affecting markets, amid already tender stocks in the wake of the coronavirus panic. Russia refused to cut production, in an effort to suffocate America’s high-cost shale producers with cheap crude oil. Saudi Arabia responded by slashing prices and elevating production in what is precisely the opposite of what is needed to balance the market, as oversupply is now rampant.
“With each day there seems to be yet another trapdoor lying beneath oil prices,” Louise Dickson, an analyst at Rystad Energy, wrote in an emailed comment. “What we are seeing here is essentially the atomic bomb equivalent in the oil markets.”