- Oil prices have dropped again, this time by 16%, and has heightened fears of storage
- COVID-19 has led to a fall in global demand for oil and subsequently a fall in global prices of the commodity
- A number of producers have, meanwhile, initiated moves to cut down on production due to the drop in demand
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YEN.com.gh has learned that oil prices have fallen by another 16% and led to fears over storage.
Information available shows that West Texas Intermediate (WTI), which is the benchmark for the United States of America (USA), slipped 16.12%, or $2.06, to trade at $10.72 per barrel.
It has also been gathered that the international benchmark, Brent crude, traded 5.45% lower at $18.90 per barrel.
READ ALSO: Energy minister commissions GHC30 million to provide power for Ghanaians
Per a myjoyonline.com report, estimates show that the coronavirus pandemic has erased as much as a third of global demand for oil, leading to prices tumbling to record lows.
Oil prices were subjected to a new form of pressure on Monday, April 27, 2020, after the United States Oil Fund, which trades under the ticker ‘USO’ and is popular with retail investors, said it would sell all of its contracts for June delivery beginning Monday, in favor of longer-term contracts.
According to the Economic Intelligence Unit (EIU), USO’s move is a recognition of the bleak prospects for the US oil sector in May and June 2020.
Several producers have also announced production cuts as demand for oil drops but some are convinced it won’t be fast enough to combat the unprecedented fall in demand resulting from the pandemic.
YEN.com.gh earlier reported that oil prices in the United States of America (USA) dropped by a historic 305% and sold at -$36.73 per barrel.
The historic fall on Monday, April 20, 2020, saw traders unloading positions ahead of the May contract’s expiration on Tuesday, April 21, 2020.
YEN.com.gh understands that presently, buyers are being paid to take delivery as there is cost associated with transportation and storage.
READ ALSO: Royal Vopak NV: World's biggest storage firm running out of space to store oil
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