Oil Price Drops to $28 as Supply Cuts Not Enough

OE Staff
Wednesday, April 15, 2020

Oil fell 5% to around $28 a barrel on Wednesday, pressured by reports suggesting persistent oversupply and collapsing demand due to global coronavirus-related lockdowns.

The International Energy Agency (IEA) on Wednesday forecast a 29 million barrel per day (bpd) dive in April oil demand to levels not seen in 25 years and said no output cut could fully offset the near-term falls facing the market.

Brent crude fell $1.49, or 5%, to $28.11 a barrel as of 0827 GMT, giving up an earlier gain. U.S. West Texas Intermediate crude slid 51 cents, or 2.5%, to $19.60.

"There is no feasible agreement that could cut supply by enough to offset such near-term demand losses," the IEA said in its monthly report. "However, the past week's achievements are a solid start."



The Organization of the Petroleum Exporting Countries, along with Russia and other producing countries - a grouping known as OPEC+ - has partnered with other oil-pumping nations like the United States for a record supply-cutting agreement.

The IEA report added to downward pressure caused by rising inventories.

Industry group the American Petroleum Institute said on Tuesday that U.S. crude inventories rose by 13.1 million barrels, more than analysts expected. Official government inventory figures are due later on Wednesday. 

(Additional reporting by Yuka Obayashi; Editing by Alexander Smith)

Categories: Energy Russia Activity Oil Production Saudi Arabia Oil Price

Related Stories

Scorpio Bulkers Plans to Buy Wind Turbine Installation Vessel

Neptune Energy Halts Drilling Op in Norway After COVID-19 Cases on Seadrill Rig

Borr Drilling Wins Rig Work. Says Worst is Over for Jack-up Market

Current News

Subsea Energy Solutions Eyes Business in Brazil

Oil Prices Hit 5-Month High

Delek Sells $2.25B of Bonds to Finance Leviathan Gas Field

Offshore Wind Could Bring In $1.7B to U.S. Treasury by 2022

Subscribe for OE Digital E‑News