Travel and industry activity around the world has narrowed to prevent the spread of the coronavirus. Oil prices continued to decline.
Brent crude LCOc1 futures had fallen 35 cents, or 1.3%, to $26.63 a barrel by 1223 GMT. In early U.S. trading, West Texas Intermediate (WTI) crude CLc1 futures erased earlier losses and were up 84 cents, or 3.7%, at $23.47 a barrel, having fallen 2 percentage points more than Brent this year.
Demand destruction caused by the coronavirus pandemic caused an unexpected price war that erupted between Russia and Saudi Arabia, effectively terminating the OPEC + alliance and saturating the market with oil.
Limits are being pushed by the excess of supply. Regulators in Texas thought to stop production for the first time in about 50 years. The US is said to plan to send a special energy envoy to Saudi Arabia to balance the global oil market.
The six-month spread of Brent futures LCOc1-LCOc7 hit its steepest since 2009 at a discount of around $9, a contango structure which reflects the current oversupply.
Oil prices posted losses of four weeks, and have declined by more than 60% since the beginning of the year. Prices of everything from coal to copper have also been hit by the coronavirus crisis, while bond and stock markets are in rarely charted territory.
Based on this gloomy outlook, the downward spiral in oil prices will likely continue and the search for a price base is definitely not over.
The latest potential casualty of the pandemic is the Tokyo Olympics that increased the potential negativities for Japan and game organizers. Canada and Australia have already announced that they will not send athletes to the event.
Analysts and producers are reducing demand forecasts day by day, and the figures fluctuate around a loss of about 10 million barrels.