The price of global crude oil is plunged drastically starting this week and it is expected to fall below $20 a barrel this quarter. Amidst the ongoing crisis induced by the global outbreak of coronavirus. The world crude oil companies are facing different issues. Also, the disagreement between the world’s top exporter of crude oil. Saudi Arabia and Russia lead to increased production. This had resulted in a 30% instant crash of crude oil price last month and recorded the lowest price in the last 29 years.
Also Read: Crude Oil Prices crash drastically after Saudi Arabia threaten to increase production
Recently, Saudi Arabia and Russia postponed their meeting on cutting overall production of crude oil. The uncertainty caused due to the Coronavirus pandemic further impacted the price negatively. Despite a strict response by President Donald Trump over Russia and Saudi Arabia’s disagreement and his warning to impose a tariff to uplift the declining market of crude oil, there were no considerable positive changes noticed.
Changes in Crude oil price over the quarter
As the global spread of Coronavirus and war over oil production has already worsened the crude oil price, a survey conducted by CNBC concluded that oil prices could further dive below $20 per barrel. In a survey of 30 prominent analysts, traders and strategists, 12 respondent has said the prices could fall below $20 this quarter. According to this report, JBC Energy’s Benigni warned about a terrible situation where the price may go beyond $10 a barrel.
The Road Ahead
Although the price of international crude oil was bounced back after rivals, Saudi Arabia and Russia indicated a possible agreement on the cutting of oil production. Nevertheless, the worldwide lockdowns, drastic fall in the movement of vehicles, cessation of numerous industries have severely impacted the demand of crude oil. The demand for crude oil is historically reduced. The looming uncertainly over the hindrance of this virus and easing of lockdowns collectively contribute to further deterioration of crude oil prices.