The price of oil plunged more than 40% this week despite growing global optimism about the Coronavirus pandemic; with prices per barrel dropping below $11 for the first time since the 1990s.
“The selloff came as the May futures contract for West Texas Intermediate crude oil — which expires Tuesday — plunged about 40 percent to $10.77 a barrel, a level not seen since the late 1990s. Investors have been concerned about oil producers churning out more fuel than the world can store even as the coronavirus pandemic has destroyed demand for travel,” reports the NY Post.
“At a minimum, oil prices will be the last asset class to recover from lockdown,” said Stephen Innes, chief global market strategist at AxiCorp. “End transport demand will only occur in the final stages of reopening when border crossing is allowed, and travel restrictions get lifted.”
“We’ve seen a strong rebound in equity markets prior to last week so it wasn’t really surprising to see some profit taking,” Craig Erlam, senior currency analyst at OANDA, reported in a commentary. “It’s now a question of how keen investors will be to jump back in.”
Read the full report at the New York Post.