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The fall in Brent crude prices have continued into Monday as governments act to contain the coronavirus pandemic.
Several lockdowns have slashed oil prices and demand projections. Government actions threaten a worldwide economic contraction, reported Reuters.
According to the news agency, Brent crude futures fell $1.54, to $25.44 a barrel. This 5.7% was much greater than the fall in West Texas Intermediate (WTI) crude. Here, futures were down $0.36, or 1.6%, to $22.22 per barrel.
Since the beginning of the year, oil’s value has fallen more than 60%. Overall losses hav continued for four consecutive weeks.
The demand reduction caused by the coronavirus pandemic comes since the collapse of a supply cut agreement proposed by the Organization of the Petroleum Exporting Countries (OPEC) and its allies.
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This led to a price war between Saudi Arabia and Russia. The countries have both increased oil production, leading to over-production suppressing oil prices.
OANDA senior market analyst Edward Moya was quoted by the news agency as saying: “Even if oil prices somehow manage to rebound a little more, oil is heading south as the demand destruction for crude will only get worse as more countries intensify their shutting down of non-essential business efforts and as storage space for crude runs out.”
Meanwhile, oil refiners across the world are cutting down production or considering cuts as the Covid-19 pandemic seems to evaporate demand in the already volatile situation.
Coronavirus global impact
Meanwhile, the number of Covid-19 recoveries has passed 100,000. The global death toll stands at more than 15,298. Authorities have confirmed more than 349,187 cases.
Italy has rapidly become the most affected country in Europe, now considered as the epicentre of Covid-19 outbreak. The death toll in the country has increased to 5,476, exceeding the total fatalities reported in China until now.
Singapore’s health ministry confirmed the first two deaths, while the country reported at least 385 confirmed cases.