US crude falls below $17 a barrel as coronavirus pandemic throttles global demand

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US crude on Monday fell below $17 a barrel to fresh multi-year lows as the coronavirus pandemic throttles global demand, despite a deal to slash output by major producers.

West Texas Intermediate, the US benchmark, was down 7.5 percent to $16.9 a barrel in early Asian trade.

International benchmark Brent was 0.5 percent lower at $27.94 a barrel.

Oil closed last week at the lowest since 2002 as a historic OPEC+ production cut failed to counter a wave of gloomy demand forecasts and concerns that traders are quickly running out of room to store crude.

Futures in New York ended the week down 20 percent after Sunday’s agreement by OPEC+ to cut output by almost 10 million barrels a day. The agreement wasn’t enough to overcome signs that energy demand was cratering as people sheltered from the coronavirus pandemic.

The latest developments come following reports Saudi Arabia and Russia signaled they may be open to further output cuts after the latest OPEC+ deal to curb global oil supplies failed to stem crude’s downward spiral.

The Organization of Petroleum Exporting Countries (OPEC) projected on Thursday that even full implementation of the cuts will not prevent a surplus in the second quarter, when demand for its crude will fall to the lowest in three decades.

(With inputs from Bloomberg)

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