Oil prices slumped further during electronic trading on Sunday evening, with US WTI futures slumping to their lowest since November 2001. Oil prices have been under intense pressure as the COVID-19 pandemic destroys demand for transportation fuels. As of April 20, the virus has infected 2,406,823 people and killed 165,054 of them.
The Organization of the Petroleum Exporting Countries and the International Energy Agency have forecast that fuel demand would continue declining. OPEC and other major oil producers have agreed to cut production by up to 20 million bpd, but demand decline is expected to eclipse that amount.
Many oil companies have announced production cuts, including majors such as Chevron, BP, and Total. However, the weak economic outlook is expected to weigh on oil demand. Exploration and production companies in North America have pledged about a 36% cut in their budgets, while worldwide companies have reduced budgets by 23%, on a yearly basis, according to analysts at Evercore ISI.
The front-month WTI May futures contract dropped $1.05 (5.8%) to $17.22/barrel by 2323 GMT, after hitting $17.14/barrel at one point, the lowest since November 2001. The June contract fell 57 cents (2.3%) to $24.45/barrel. The international benchmark Brent also declined 32 cents (1.1%) to $27.76/barrel.
