Crude oil prices settled below $30 a barrel as the coronavirus pandemic slowed economic growth and oil demand on Tuesday while Saudi Arabia and Russia kept up their battle for market share.
Countries including the United States and Canada, along with nations in Europe and Asia, are taking unprecedented steps to contain the virus, which has already killed 7,500 people. Numerous governments have told residents to restrict their movements while businesses shutter, curbing demand for fuels.
Brent crude futures fell $1.32 to settle at $28.73, the first time that benchmark has settled below $30 per barrel since 2016. It then fell further in post-settlement trade. West Texas Intermediate (WTI) crude futures fell $1.75, or 6.1%, to settle at $26.95 a barrel. “You’re getting new demand destruction news coming at you every hour,” said John Kilduff, a partner at Again Capital Management in New York. Amid the loss of demand because of the pandemic, Saudi Arabia and Russia remain embroiled in a price war that erupted after the two top producers failed to agree to extend supply curbs to support the market. The Saudi energy ministry said on Tuesday that the kingdom’s crude exports are set to rise in coming months to more than 10 million barrels per day, as it plans to use more gas for power rather than burning crude.