LONDON-Oil prices fell on Thursday, ending three sessions of gains, as movement restrictions worldwide to contain the CCP virus, destroyed demand and overshadowed expectations that a U.S.
West Texas Intermediate slipped 7.7 percent, or $1.89, to settle at $22.60 per barrel, while Brent fell $1.01, or 3.69 percent, to trade at $26.43 per barrel. USA crude futures fell 21 cents, or 0.9 per cent, to $23.80 a barrel.
USA senators and Trump administration officials have reached an agreement on a $2 trillion stimulus bill that congress was expected to pass on Wednesday. Both contracts are down about 60% this year.
NTD News refers to the novel coronavirus, which causes the disease COVID-19, as the CCP virus because the Chinese Communist Party's coverup and mismanagement allowed the virus to spread throughout China and create a global pandemic.
A combination of faltering demand resulting from the coronavirus outbreak and a price war that has seen a rise in production had already raised fears that the industry was entering its worst crisis in hundred years.
"The scale of the demand collapse will require a large amount of production to be shut-in, of potential several million barrels per day", the bank said, adding that such a hit on production would not likely be reversed quickly.
"All indexes pointed to worsening conditions among oil field services firms", the Fed said in its report, noting that the business activity index plunged from -4.2 in the fourth quarter to -50.9 in the first, the lowest reading in the survey's four-year history.
Oil prices have fallen by more than 45 per cent this month after OPEC+, comprising the Organization of the Petroleum Exporting Countries (OPEC) and other producers, including Russian Federation, failed to agree on extending output cuts.
The United States said Wednesday it has urged Saudi Arabia to "reassure" oil and financial markets as the world grapples with the outbreak.
"Even if we do see some restraint from the Saudis, the world is still set to see a significant oil surplus over 2Q20, given the demand hit we are now seeing".
Crude oil prices on Wednesday rose 5.5 per cent to Rs 1,976 per barrel as participants widened their positions tracking a positive trend overseas.
Products supplied, a proxy for USA demand, dropped almost 10% to 19.4 million bpd, EIA data showed.