Oil's collapse deepens. stocks drop worldwide

Описание: (21 Apr 2020) Oil prices crumpled even further Tuesday, and U.S. stocks sank to their worst loss in weeks as worries swept markets worldwide about the economic carnage caused by the coronavirus pandemic.
The market's spotlight was again on oil, where prices have plummeted because very few people are flying or driving, and factories have shut amid widespread stay-at-home orders. Global demand is set to drop to levels last seen in the mid 1990s. At the same time, oil producers can't slow their production fast enough, and all the extra crude means storage tanks are quickly running out of room.
The cost for a barrel of U.S. oil to be delivered in June plunged 43% to $11.57. That's the part of the market that oil traders are focused on and trading most actively. For oil to be delivered next month, which is when storage tanks could top out, the cost of a barrel stood at $10.01. A day earlier, it fell below zero for the first time, meaning traders paid others to take oil off their hands to get rid of the headache of finding where to store it.
Prices did not drop below zero, in part because the storage issues aren't as pressing for them. But they also slid Tuesday on the same concern: A global economy incapacitated by the virus outbreak doesn't need to burn as much fuel.
Analysts consider prices for U.S. oil to be delivered in June and later as closer to the "true" price of crude, along with prices for international oils.
Matt Marshall, director of market analytics, at oil hedge fund advisor Aegis Energy Risk, said that even with swift government intervention in the US to cut oil production and provide financial aid to the big oil producers, he's pessimistic it will help prop up the price of oil per barrel. "We really are weeks or months away from seeing storage be too full to able to serve as a buffer anymore," Marshall said.
Brent Crude, the international standard, for delivery in June lost 24.4% to $19.33 per barrel.
The crumbling oil market helped drag stocks to their second straight day of losses, and the S&P 500 lost 3.1% for its worst drop since April 1. It followed up on similar declines across Europe and Asia.
"We've just had the OPEC, non-OPEC agreement, the world's biggest ever reduction in supply and it's made no difference," said Richard Swann, head of oil price reporting in the Americas for S&P Global Platts.  "Such is the scale of the demand destruction we've seen since the coronavirus hit."

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