Oman crude oil price at the Dubai Mercantile Exchange (DME) on Tuesday plunged 13.6 per cent and closed at below US$17 per barrel, the lowest level in more than two decades.
Global oil benchmarks Brent and West Texas Intermediate again plunged on Tuesday amid concern about the availability of crude storage capacity worldwide and fears that energy demand may only recover slowly once countries ease curbs imposed on economic and social activity to combat the coronavirus pandemic.
The DME in a statement said that Oman crude future contract (June delivery) price at the exchange dropped by US$2.63 to US$16.82 per barrel on Tuesday. Oman crude price for June delivery on Monday had dropped to US$19.45 per barrel.
According to the DME, the average price of Oman crude for May delivery has stabilised at US$34.85 per barrel, which was nearly US$20 per barrel lower than April delivery price.
Oil prices are continuing to decline for past few weeks even with OPEC and its allies led by Russia recently agreed on record output cuts of 9.7mn bpd from May 1. Oil analysts believe that this reduction in volume is not nearly enough to offset a drop in demand of around 30mn bpd due to COVID-19 restrictions.
With a sharp reduction in economic activity around the world after coronavirus lockdowns, global oil demand is expected to fall by a record 9.3mn barrels per day year-on-year in 2020, the International Energy Agency warned in its monthly report.