US Oil Futures Fell to a Minimum of 18 years

Oil prices dropped on Wednesday for the third consecutive session. With US oil futures falling to a minimum of 18 years. In the case of Brent, it dropped to a minimum of 16 years. The suspension of travel and social life to curb the coronavirus increased the possibility of the most significant annual drop in oil demand in history.

At 14:07 GMT, West Texas Intermediate (WTI) futures in the United States were down $2.82, or 10.46% at $ 24.13 a barrel. This is after hitting $ 23.60, its low since April 2002.

The last time crude oil operated so low was when China had begun to rise as a world superpower. Propelling world oil consumption to record highs in subsequent years.

For its part, the international benchmark Brent was down $ 1.87, or 6.37%. At $ 26.86 a barrel, after having plummeted to $ 26.66, its lowest level since late 2003.

Both contracts were headed for a quarterly decline of close to 60%, the largest since at least the 1980s.

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The effect of Coronavirus on demand is increasingly sharp

Goldman Sachs said in a note that the collapse of oil demand due to the spread of the coronavirus seems increasingly sharp. It predicted a decline in the price of Brent to $ 20 per barrel in the second quarter. A level not seen since early 2002.

The bank expects a contraction in demand of 8 million barrels per day (BPD) by the end of March. And an annual decline of 1.1 million BPD in 2020. Which would be the largest ever recorded, according to its data.

Rystad Energy went even further, predicting an annual decline in oil demand of 2.8 million BPD, or 2.8%, this year. To put the figure in context, last week, it projected a decline of just 600,000 barrels.

In addition to imposing social restrictions not seen since World War II, the world’s wealthiest nations were preparing to free up billions of dollars of spending to alleviate the effects of the coronavirus outbreak.

Professor Harari, the most successful historian in the world today, said that the consequences of the coronavirus are not just economic. They are also political and even cultural. They are going to be with us for many, many years after this epidemic goes through. However, our advantage over the virus is information. What the Chinese and Koreans have learned in recent months on dealing with the outbreak, can be beneficial to the other parts of the world.