Oil prices slump as COVID-19 cases surge past 700,000 globally

LONDON: Oil prices plunged Monday as the number of novel coronavirus cases worldwide surged past 700,000, reinforcing worries about the impact of the pandemic on the global economy.

Stock markets reacted differently to the prospect of much of the world remaining in confinement for weeks to come, with some moving higher as officials moved to deal with the crisis, while others slid further.

Crude oil struck the lowest levels in more than 17 years on Monday, with Brent North Sea tumbling to $22.58 per barrel at one point.

“Estimates for the (oil) demand side are being revised downwards on an almost daily basis, while on the supply side there is still no sign of any reconciliation between Saudi Arabia and Russia” regarding their price war, Commerzbank said in a client note.

There are warnings that oil could sink even further as storage tanks around the world approach full capacity.

Saudi Arabia, meanwhile, announced it would raise exports by 600,000 barrels per day to a record 10.6 million barrels per day in May.

In Asia, stock markets mostly fell following the steep drop on Wall Street and in Europe on Friday. Australia was out on its own — its stock market surging 7% as the country’s virus infections slowed, while after the close of trade in Sydney, the government unveiled an income-support plan worth US$80 billion.

European stocks were mostly lower in afternoon trading as the number of deaths in the regions jumped past 25,000 and the economic cost of the pandemic is becoming more apparent.