2020.04.2010:52:00UTC+00Oil Slumps As Demand Worries Weigh

Oil prices tanked on Monday amid renewed concerns over a slump in demand as the coronavirus positive cases across the world crossed 2,400,000 and the death toll topped 165,000.

Benchmark Brent crude tumbled 3.6 percent to $27.07 per barrel, while West Texas Intermediate crude futures for May delivery were down as much as 26 percent at $13.50 a barrel.

The troubled combination of falling demand amid travel restrictions around the world and lack of global storage for crude oil has pushed the oil prices to the lowest level in 21 years. Stockpiles continued to rise sharply despite recent supply cuts.

Earlier this month, Russia and other oil-producing nations finalized an unprecedented production cut of nearly 10 million barrels, or a tenth of global supply, to boost prices amid the coronavirus pandemic.

The International Energy Agency has warned that the output cuts may not be enough to offset a severe plunge in oil demand. The IEA expects a 29 million barrel per day (bpd) dive in April oil demand to levels not seen in 25 years.

Available oil storage capacity around the world is running thin - approaching full capacity amid declining global demand.

The supply-demand imbalance in the oil market is not expected to improve just by countries buying crude to add to their strategic reserves.