AGENCIES, Singapore: It’s no secret now that the coronavirus pandemic is creating havoc and panic in world economies. And that nervousness continues as the global death toll due to the virus has crossed 170,000 while over 2.5 million people are reported to be infected.
Brent crude plunged more than 12 per cent to below $17 a barrel on Wednesday while US oil erased early gains and fell
While storage facilities approach full capacity, it was another day of volatile trading, US benchmark WTI surged in early Asian deals while Brent also edged up on news that top producers had held talks — only for prices to suddenly change course.
Brent dropped 12.31 percent to $16.98 a barrel, extending heavy losses from a day earlier.
WTI for June delivery, which had rebounded about 20 per cent at the open, was down around five per cent at $11 a barrel in the afternoon.
The negative prices meant that traders were forced to pay to have the crude taken off their hands.
Analysts said the morning bounce was driven by news that members of exporting group OPEC, as well as some allies in the OPEC+ grouping, held a teleconference Tuesday — but grim reality soon returned to the markets.
Prices have plunged as lockdowns and travel restrictions introduced worldwide to stem the spread of the virus hammer demand, and observers believe there is little way out for oil except bringing an end to the pandemic.
“The overtly bearish sentiment may well keep prices suppressed in the near-term until we find the light at the end of the tunnel with progressive resumption of halted economic activities across the globe,” said Jingyi Pan, a market strategist with IG.
The crisis was worsened by a price war between Saudi Arabia and Russia. They drew a line under the dispute earlier this month and, along with other top producers, agreed to slash output by almost 10 million barrels a day to shore up virus-hit markets.