WTI oil price drops to 18-year low
West Texas Intermediate crude dropped at $19.87 per barrel on the New York Mercantile Exchange, the lowest level since Januaury 31, 2002.
Brent crude rose by 0.86% to $28.07 per barrel on the ICE Exchange in London.
Oil has plunged about 20% in New York since the group on Sunday agreed to trim worldwide production by an unprecedented 9.7 million barrels a day, as lockdowns aimed at containing the coronavirus cause the biggest demand slump in history. Prices hit a fresh 18-year low below $19 a barrel on Friday, Bloomberg reported.
A leading analyst of the National Energy Security Fund, a lecturer at the Financial University under the Government of the Russian Federation, Igor Yushkov, speaking to Vestnik Kavkaza, noted that the drop in the WTI price with the relative stability of the Brent price can be explained by different expectations of traders from the European and American oil markets. "This is primarily about assessments of quarantine cancellation in different regions of the world. China has already dropped the strict regime, followed by other Asian countries. The acute phase of the pandemic is on the decline in Europe, which means that they will begin to ease restrictions and allow transport links, which, in turn, means an increase in demand for oil products," he explained.
"Now, thanks to the new OPEC + deal, there will be no price war, since all countries, including Saudi Arabia, will limit the oil output. Saudi Arabia will reduce supplies to other regions where, for example, Russia can sell oil. And this also helps the Brent price to remain more or less stable, while WTI is falling due to uncertainties with the terms of quarantine cancellation in the U.S. and the higher speed of filling American storages," Igor Yushkov pointed out.