Oil price goes below $30 a barrel following brief rise
Oil prices have fallen below $30 a barrel due to coronavirus uncertainty and the Russia-Saudi Arabia price war.
This comes after they staged a slight rise this morning as investors searched for a bargain.
Brent crude fell to $29.82 a barrel having peaked earlier at $31.
Stephen Innes, chief markets strategist at Axicorp told Reuters the earlier rises were caused by investors taking advantage of the low price.
Further volatility ahead
The United States took the opportunity to fill its Strategic Petroleum Reserve.
“But those storage facilities are rapidly filling”, Innes added.
“If storage does fill, quashing that demand, oil prices are sure to collapse further, and the global markets will then have to hope that the dispute between Saudi Arabia and Russia is resolved before we reach that point of no return.”
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Saudi Aramco has signalled it will keep to its plans for increased production through May and June as it is satisfied with the current price.
In addition to the price war, a slump in global demand for fuel due to coronavirus is behind the low oil price levels.
This has led with fears, including by US President Donald Trump, of a global recession.
Major international airlines have cancelled flights and a major fall in driving has been reported in the US.
“A deeply imbalanced supply and demand outlook has not changed as Saudi and Russia have ramped up production in a time when global energy demand is badly hurt by border controls and travel bans,” Margaret Yang of CMC Markets told Reuters.
The Dow Jones saw its biggest fall since the 1987 Black Monday panic yesterday.
It fell nearly 3000 points — a drop of 30 per cent.