Oil slips further as global demand expected to slump 20 per cent
The price of crude oil dropped after the International Energy Agency (IEA) forecast that global oil demand would fall by approximately 20 per cent year on year, an energy analyst at Thai Oil said on Friday (March 27).
The IEA expected global oil demand to drop by up to 20 million barrels per day, as more than 3 billion people worldwide were prohibited from travelling and stayed at home due to various measures by many countries to contain the spread of the Covid-19 virus.
The US announced it would suspend the plan to purchase 30 million barrels of oil for the Strategic Petroleum Reserve which is part of the US measure to buy oil from small and medium oil producers in countries affected by the decline in oil prices. This measure was suspended because the US Congress did not approve the budget of up to US$2 billion.
The US government's $2-trillion economic stimulus measure and quantitative easing (QE) bond purchase programme helped relieve investor concerns.
Benzene fuel prices rose in contrast with Dubai crude oil after US benzene fuel reserves dropped, while oil demand was still under pressure from the Covid-19 outbreak.
Diesel fuel prices rose lower than Dubai crude oil after diesel fuel demand dropped due to the lockdown in India to contain the spread of Covid-19 virus while oil refineries in the Middle East resumed operations, leading to oversupply.