Singapore: Oil plummeted after President Donald Trump said the U.S. would suspend all travel from Europe for the next 30 days to try and contain the coronavirus, pummeling fuel demand even further.
Futures in London fell as much as 5.9% after being up shortly before Trump began a much-anticipated address on the U.S. response to the virus. The president also called on Congress to pass immediate payroll tax relief, but there was little in the way of specific measures to cushion the blow to the world’s largest economy.
Trump’s briefing came after the battle for oil market share intensified as Saudi Aramco announced plans to boost oil production capacity to 13 million barrels a day and Abu Dhabi National Oil Co. vowed to pump as much as possible next month. The underlying bearishness was reflected in the nearest timespread for the global Brent benchmark, which has sunk deeper into a contango structure, signaling oversupply.
”We are now staring at the whole world going into a lockdown,” said Vandana Hari, founder of Vanda Insights in Singapore. “Oil demand can be expected to crash through the floor and all previous projections on oil consumption are now out the door.”
Brent crude for May delivery fell 5.3% to $33.88 a barrel on the London-based ICE Futures Europe exchange as of 9:55 a.m. in Singapore. It dropped 3.8% on Wednesday. The global crude benchmark traded at a $2.40 premium to West Texas Intermediate for the same month, the narrowest since mid-2017.
WTI crude for April declined 6.3% to $30.90 a barrel on the New York Mercantile Exchange after climbing as much as 2% earlier. It closed down 4% at $32.98 on Wednesday. –Bloomberg
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