WTI Oil Falls to $22.60 in the US

The price of Texas intermediate oil ( WTI ) dropped this Thursday by 7.7% and closed at $22.60 a barrel.

At the end of live trading on the New York Mercantile Exchange (Nymex), WTI futures contracts for delivery in May decreased $1.89 from the previous session on Wednesday.

Oil prices fell due to the steep drop in fuel demand. Oil inventories in the United States increased by 1.6 million barrels in the most recent week, according to the Energy Information Administration, marking the ninth consecutive week of increases.

Likewise, analysts point out that the future of the crude oil market is uncertain until there is a rapprochement between Russia and Saudi Arabia to end their price war. 

Saudi Arabia and Russia don’t seem to restrain the oil price war, even though G20 leaders discussed the coronavirus’s impact on the global economy.

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G20 summit closes with no resolution on price war

At the last OPEC meeting in Vienna, oil-producing countries weren’t able to reach the agreement to deepen the cuts in the production of Saudi Arabia and Russia. Quite the opposite, Saudi, the de facto leader of OPEC, announced its plans to raise output by a third. Saudi Arabia also cut the prices of oil exports, which put extreme downward pressure on the market.

As of April 1, Riyadh and Moscow are set to pump as much crude as they see fit. The move will further increase the supply of “black gold” at a time of low demand in which the world’s major powers have imposed robust flight restrictions.

In this context, gasoline futures contracts maturing in May remained almost flat at $ 0.61 a gallon. And natural gas contracts, maturing the same month, subtracted 3 cents to $ 1.69 for every thousand cubic feet.

The US pressured on Saudi Arabia this week to ease off its plans to flood the market with crude. Despite this, a post-meeting statement by the G20 didn’t mention oil nor energy. 

The G20 stated that it commits to whatever it takes. The forum takes responsibility to use all available policy tools to minimize the economic and social damage from the epidemic, support market stability, increase flexibility, and restore global growth.

Saudi King Salman bin Abdulaziz hosted the meeting. He holds the G20’s chairmanship this year.

Before the meeting, Dmitry Peskov, a Kremlin spokesman, made a statement. He mentioned that oil markets were not on the list but that the leaders would discuss the global economy.

Some US shale producers have been pressuring the Trump administration to intervene in the oil price war.