Thu, 28 Mar 2024 Today's Paper

Global energy market hit hard by COVID-19

By

2 April 2020 12:02 am - 1     - {{hitsCtrl.values.hits}}

A A A

 

  • WTI and Brent Crude suffered worst slump in recent years

 

By Sandun A. Jayasekera

The COVID 19 viral infection that has devastated the entire world, has hit the global energy market hard as the fuel prices have dropped to a record low. On Tuesday (March 31st), oil had its worst quarterly performance ever, as coronavirus and a global price war weighed on the commodity.  

 According to news agency reports, the US West Texas Intermediate (WTI) crude plunged by 66% to $20.40 per barrel and Brent Crude which Sri Lanka purchases had dropped by 65% to $22.71 per barrel on Tuesday.   
The sad phase of this price slump in the global crude oil market is that smaller countries like Sri Lanka cannot enjoy the full benefit, as the industry, agriculture, tourism, transport, garment and apparel and other key sectors of the country’s economy have been slowed down to a standstill and productions and exports have dropped to less than 10%.


A Sri Lankan oil analyst on condition of anonymity told Daily Mirror that if the oil Hedging system was in operation, the country would have had some benefits by placing a big order for fuel under reduced prices. Analysts think that oil prices could fall even further this month, as Saudi Arabia and Russia boost production to record levels. Oil just posted its worst quarterly performance ever, dragged down by the coronavirus pandemic and a global price war that has erupted at the same time.   


The foreign agency reports said in the US’ WTI crude was down as much as 66% year-to-date by Tuesday, while international benchmark Brent Crude shed as much as 65% at the same time. The West Texa Intermediate (WTI) traded at roughly $20.40 per barrel, while Brent Crude was about $22.71 per barrel.   


Demand has dropped sharply as the COVID-19 outbreak has raged on non-essential travel has been banned, leading to cancelled flights and consumers are being told to practice social-distancing measures, keeping gas prices depressed as well.   


As demand took a hit, the Organisation of the Petroleum Exporting Countries (OPEC) and its allies failed to agree on production cuts past March 31. Both Saudi Arabia and Russia are preparing to significantly ramp up production starting on April 1.   


Current domestic prices of fuel in the country were fixed for the last time in August, 2019 when a barrel of Brent Crude oil traded between US$ 60 - 65 at the global market.   

 

  • As demand took a hit, the Organisation of the Petroleum Exporting Countries (OPEC) and its allies failed to agree on production cuts past March 31

 

 


Order Gifts and Flowers to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Grocery, Kids Toys, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,Astrology, Courier/Delivery, Medicine Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka

  Comments - 1

Order Gifts and Flowers to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Grocery, Kids Toys, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,Astrology, Courier/Delivery, Medicine Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka
  • Sarath Dharmawardhana Thursday, 02 April 2020 03:06 PM

    GOSL should consider make use of trinco oil tanks to import and store atleast six month or more crude oil requirment in order to get the price advantage at present. In the event Govt is unable to arrange deffered terms to meet these import bills they may be able to use various options to raise funds even with the assistance of private sector.


Add comment

Comments will be edited (grammar, spelling and slang) and authorized at the discretion of Daily Mirror online. The website also has the right not to publish selected comments.

Reply To:

Name - Reply Comment





Order Gifts and Flowers to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Grocery, Kids Toys, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,Astrology, Courier/Delivery, Medicine Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka

VAT increase: SOUNDs death knell for publishers, readers

Though the Government imposed VAT (Value Added Tax) on vegetables and other e

How female change-makers are driving Sri Lanka’s energy saving platform

Saving energy has become more of a responsibility than a habit in today’s c

A dull Ramadan awaits Muslims amidst the Soaring Cost of Living

In the coming days, Muslims across the world will welcome the Holy Month of R

New wildlife underpass to curtail HEC

As of February 2024, Sri Lanka lost another 38 elephants as a result of the H