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Oil prices dropped on Monday as oil storages around the world are filling rapidly. This raised concerns that output cuts may not compensate for the collapse in demand due to the pandemic.
U.S. oil futures fell after U.S. crude inventories gained 518.6 million barrels in the week ended April 17, while floating crude oil storage rose to an all-time high of 160 million barrels.
U.S. West Texas Intermediate futures dropped 7.2%, or $1.22, at $15.72 per barrel. Brent crude fell 1.5%, or 33 cents, at $21.11 per barrel.
The global oil demand has declined 30% since the crisis. The global economic activity is forecasted to contract by 2%, worrying investors that output cuts may not be enough to buoy oil prices.
Russia has planned to cut its western seaborne exports by half in May, while Kuwait and Azerbaijan have also planned to cut output.
OPEC and its allies including Russia have agreed on a 9.7 million bpd production cut that will begin in May.