All the futures in the US crude oil industry has faced drop in prices that has been the greatest in the last 18 years owing to the coronavirus lockdowns. Due to all the major social establishments likes offices, schools, banks, government buildings being closed for the prevention from the Coronavirus pandemic, half the value for all the oil futures have dropped in the last 10 days. The US oil market hasn’t faced price dropping like this since 1983.
"The market is cascading. It's trying to search for a bottom and it doesn't seem able to find one," said Gene McGillian, vice president of research at Tradition Energy in Stamford, Connecticut.
"There are fears of an economic collapse because of what this virus represents, globally."
Reports from Goldman Sachs say that the global oil demand will drop drastically by the end of March which can measure up to 8-9 million barrels each day. Per barrel oil price in the US dropped by 24.4 percent and was last available at $20.37 a barrel as US crude futures prices have dropped by 56 percent in the last 10 days.
Physical markets for oil have also suffered a sharp fall as the traders from Saudi Arabia will lockdown all exports to the US market in the coming weeks. "Physical markets are virtually bidless," said Scott Shelton, energy salesperson from United ICAP. "It tells me prices are going lower until either OPEC comes back to the table, or the U.S. E&Ps start announcing cuts to production." The oil minister of Iraq has pleaded for an emergency meeting between members of the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers to discuss immediate action to support the market. "With the Saudis and Russians in a fierce battle for market share, it is difficult to see any quick resolution on this front," ING said of Iraq's request.
In the coming months, as situations start getting better, Russia hopes to see higher prices for oils and even Saudi Arabia has promised the supply of 12.3 million bpd through Aramco.