Steep fall in demand hurts crude oil price
Crude oil price has dropped after demand collapsed with over 3 billion people worldwide prohibited from travelling, an energy analyst at Thai Oil said on Monday (March 30).
The International Energy Agency (IEA) expected that oil demand would drop by over 20 million barrels per day year on year as more than 3 billion people worldwide were prohibited from travelling and stayed at home due to uncertainty following the Covid-19 pandemic.
Saudi Arabia has announced increase in oil production capacity to 12.3 million barrels per day in April after the capacity reduction agreement ends.
However, Saudi Arabia is facing difficulty in selling crude oil as refineries worldwide are cutting their production capacity; Neste (Finland) has suspend crude oil purchase in April, Indian refineries have delayed crude oil imports, and US refineries have reduced the amount of crude oil purchased.
The G20 countries agreed to inject over US$5 trillion to cope with the economic impact of the Covid-19 virus, while the US issued a $2.2-trillion package -- considered the biggest economic stimulus measure in history -- to mitigate the economic impact of Covid-19.
Benzene fuel prices rose in contrast with Dubai crude oil after China increased the import of benzene fuels. However, oil demand was still under pressure from the Covid-19 pandemic.
Diesel fuel prices rose in contrast with Dubai crude oil as the market began to ease concerns after many countries issued measures to stimulate the economy due to the impact of the Covid-19 pandemic.