The price for US oil dipped below $ 20 a barrel on Wednesday afternoon. This is the lowest level since 2002. Brent oil was also considerably less valuable.
Oil prices slumped when it became known that oil demand in the United States was at record lows. There was also a record build-up of oil stocks.
A barrel of American oil cost 3 percent less at $ 19.50 on Wednesday shortly after 6:15 PM. Brent oil became 7.2 percent cheaper at $ 27.48.
According to the American energy agency EIA, the weekly gas consumption of the Americans fell to the lowest point ever. In contrast, 20 million barrels of oil were built up in stocks.
The EIA report underlines an earlier reading by the Paris-based agency IEA, which warned that scaling back production by OPEC’s oil-producing countries and allies will not be enough to offset the sharp drop in demand.
The organization expects oil demand to drop by more than 9 million barrels a day this year.
In April, demand is expected to plummet by nearly a third to its lowest level since 1995. According to the organization, ten years of rising global oil demand will end in 2020.
OPEC, Russia and other oil-producing countries previously agreed to cut production by nearly 10 million barrels per day to boost prices. These have fallen sharply due to the corona crisis and the price war between Saudi Arabia and Russia in the oil market.