The international oil benchmark, Brent crude , fell to $ 26 per barrel on Monday , as the demand collapse triggered by the COVID – 19 pandemic has caused a massive oversupply in the global oil markets .
The lockdowns imposed in many of the world ’ s major economies have sent crude demand tumbling.
US oil prices crashed below $ 0 per barrel on Monday , hitting the lowest level since the contract launched in 1983, on warnings that storage could fill up within weeks , according to Financial Times .
Brent , against which Nigeria ’ s crude oil is priced, dropped by $ 2 – 10 to $ 25. 98 per barrel by 9 : 44pm Nigerian time , while the US benchmark, West Texas Intermediate , sank by $ 40. 77 to – $ 22. 50 per barrel.
Oil prices have extended their declines despite last week ’ s deal by the Organisation of Petroleum Exporting Countries and its allies to cut production by 9 . 7 million barrels per day in May and June.
Analysts said the deal had not had a significant impact on prices because of the coronavirus lockdowns that have kept billions of people at home .
The Russian energy ministry has told domestic oil producers to reduce oil output by around 20 per cent from their average February levels , which would bring Moscow in line with its commitment under a global deal , according to Reuters.
“ As production continues relatively unscathed , storage is filling up by the day. The world is using less and less oil and producers now feel how this translates in prices , ” said Rystad’ s Head of Oil Markets , Bjornar Tonhaugen.
Oil in floating tanker storage is also estimated at a record 160 million barrels .
Halliburton , which generates most of its oil business in North America , joined its larger rival Schlumberger in taking impairment hits in the first quarter and issued a bleak outlook for North America .
Oil prices have collapsed by more than 60 per cent since January to levels well below the costs necessary for many shale drillers to break even , leading to drilling halts and drastic spending cuts .
Canada, the world ’ s fourth-largest oil producer , has begun to rein in production , but analysts say the biggest cuts lie ahead .
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