An oil refinery On the back of weak demand amid the coronavirus crisis along with narrowing of storage of the increasing supplies, US oil prices crashed below $5 a barrel on Monday (20 April), hitting the lowest level since the contract launched in 1983, reports Financial Times.
The West Texas intermediate (WTI) crude in US traded at historic low of $0.01 per barrel mark, lower by almost 95 per cent from its previous position.
Brent crude’s losses was much muted at $26.53 per barrel, lower by 5.52 per cent from the previous close.
Ravindra Rao, VP, Head of Commodity Research at Kotak Securities, said: "The sell-off in near month contract (on the NYMEX) is largely because of position squaring ahead of expiry. There are huge stocks in US storage and this has pressurized near month prices."
The current market is oversupplied on shrinking demand, creating a situation of free fall for crude.
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