WASHINGTON (dpa-AFX) - Crude oil prices plummeted On Tuesday as mounting concerns about a drop in energy demand due to the virus pandemic outweighed planned output cuts from OPEC and its allies.
Traders also ignored prospects for a notable drop in U.S. shale oil production in the coming month.
West Texas Intermediate Crude oil futures for May ended down $2.30, or 10.3%, at $20.11 a barrel.
The contracts hit a low of $19.95 a barrel in the session.
Brent crude futures declined by $2.14, or 6.7%, to $29.60 per barrel today.
Due to the virus outbreak and the resultant shutdown of businesses almost across the globe, it is feared the demand for energy will see a sharp fall in the near to medium term.
The latest report from the U.S. Energy Information Administration (EIA) says it expects U.S. shale output to decrease sharply this month and the next. Production is expected to drop by as much as 193,625 barrels per day from this month, while output is seen at 8.526 million barrels per day in May, the report said.
Some countries among the G20 group of nations have agreed to buy oil for their national reserves. Still, inventories are expected to fill up fast.
According to forecasts, crude stockpiles in the U.S. may have risen last week, surging for a 12th straight week. The weekly oil report from the American Petroleum Institute (API) is due later today.
The EIA will release its weekly inventory data Wednesday morning.
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