On Friday, US oil prices fell another 8%, reaching a new 18-year low of $ 18.27 per barrel. At some point, the price even fell to $ 17.33 per barrel - the lowest price since November 2001.
The accelerating collapse of the oil market reflects the realization that OPEC + 's record cuts in oil production are not enough to offset the massive decline in oil demand caused by the quarantine measures.
On April 3, after Trump talked to Saudi Arabia and when Russia intended to sharply reduce production, the price of oil rose to $ 28.34 per barrel.
After the OPEC + agreement, Trump thanked Salman bin Abdulaziz Al Saud, King of Saudi Arabia, and Russian President Vladimir Putin for resolving their recent price war.
According to Trump, "in the United States, in the energy sector, this will save hundreds of thousands of jobs."
Unfortunately, oil quotes continue to fall.
However, Friday's sale was a bit strange. While US oil prices fell, Brent oil - a global benchmark - rose moderately.
Even though the contract of US oil for April fell sharply, its contract for May remained the same. Analysts say that this large gap between contracts can continue throughout the year because the world is rapidly running out of traditional storage facilities for oil, which will force oil companies to store barrels in more expensive places, such as ships. The wider the variation, the more economical these alternative storage options will be.
"Until quarantine continues and production cuts begin, the market must find a home for these barrels," Ryan Fitzmaurice, energy strategist at Rabobank, said. "To do this, you must encourage people to be creative with the storage," he added.
Nevertheless, the nightmare of supply and demand continues.
Oil worth less than $ 20 is a nightmare for high-priced US shale oil companies, especially those that have taken loans for drilling projects that are now unprofitable. Many will be forced to shut down production, inflicting a huge blow to the US oil.
According to Rystad Energy, if oil remains at $ 20 per barrel, 140 oil producers in the United States may file for bankruptcy this year, and then another 400 in 2021, which can lead to the disappearance of countless jobs and impoverishment of the population.
