At present, high supply and the crisis of demand have led the oil prices in the global market to hover around $20 per barrel, which is at an 18-year low.
A price war in the oil market and the rage to produce more may soon end as the storage facilities are about to reach their full capacity. The bloodbath in the global crude oil market has led to the largest quarterly drop in the oil prices during quarter ending-March. The crude oil benchmarks have recorded a major decline, with WTI and Brent’s futures losing nearly 66 per cent of their value during January – March 2020. At present, large supply and the falling demand due to coronavirus pandemic have led the oil prices in the global market to hover around $20 per barrel, which is at an 18-year low.
However, the supply-led price war is on the brink as IHS Markit said that 10 mb/d of global production could be shut in between April and June. US President Donald Trump spoke with Russian President Vladimir Putin on Monday, where they agreed to have discussions on the sliding oil market. Donald Trump is looking at convincing Saudi Arabia and Russia to exit the price war, according to Oilprice Intelligence Report.
“I never thought I’d be saying that maybe we have to have an oil price increase because we do. The price is so low now they’re fighting like crazy over, over distribution and over how many barrels to let go.” Trump said in an interview with Fox News.
Meanwhile, the falling crude prices have also affected the petrol and diesel prices in India. Amid a complete lockdown and fall in crude prices, the retail prices of petrol and diesel are below Rs 70 per litre mark. On Wednesday, petrol in Delhi is being sold at Rs 69.59 per litre while diesel is being sold at Rs 62.29 per litre.