WTI closes in on multi-year lows, trades around $20.50 on demand concerns
- Demand concerns drive oil prices lower amid worldwide lockdowns.
- Saudi Arabia says there are no discussions to balance oil market.
- Dismal market mood continues to weigh on risk-sensitive oil.
The barrel of West Texas Intermediate (WTI) posted losses for the sixth straight time last meek and is now looking to close the month of March more than 50% lower.
Oil sector hit heavily by coronavirus
With concerns over falling global energy demand amid worldwide coronavirus lockdowns weighing heavily on prices, the WTI extended its slide at the start of the week and was last seen trading at $20.50, losing 6% on a daily basis. On March 18th, the WTI touched its lowest level in more than nine years at $20.05 and looks poised to test that area in the near-term.
In addition to the dismal demand outlook, the lack of effort by large oil producers to adjust the output makes it difficult for oil to stage a recovery. On Friday, an official for Saudi Arabia's Energy Ministry noted that there hasn't' been any discussions about a joint agreement to balance the market.
Commenting on the market dynamics, "the oil price war is made irrelevant by the large decline in demand and has made a coordinated supply response impossible to achieve in time," Goldman Sachs analysts said in a report on Monday, per Reuters.
Meanwhile, the ongoing flight-to-safety as reflected by falling global equity indexes and US Treasury bond yields also takes a toll on the risk-sensitive oil prices.
Technical levels to watch for