Oil price today: Crude crashes to 18-year low of around $17 per barrel; know why
Oil Price Today: Crude oil price today hit 18-year low as the oil price in international market crashed around $17 per barrel.
Oil Price Today: Crude oil price today hit 18-year low as the oil price in international market crashed around $17 per barrel. Commodity experts are of the opinion that this oil price crash has taken place due to the dollar index crashing to the tune of 2.5 per cent over the last fortnight. Apart from this, decrease in oil price demand to the tune of 40 per cent due to the Coronavirus lockdown in majority of the countries across globe is also a major reason for this tank in oil pice in the international market.
Speaking on the reason for oil price crash in international markets, Anuj Gupta, Deputy Vice President, Currency and Commodities at Angel Broking said, "Oil prices have tanked due to the falling demand over the global Coronavirus lockdown and fall in dollar index. The US currency has slipped to the tune of 2.5 per cent in the last fortnight and at the same time global oil demand has slipped to the tune of 40 per cent. These two are the major reasons for the fall in oil price in the international markets."
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He said that this fall in global crude oil price, which is at an around 18-year low, will help the Indian government save foreign reserves that it spends on he oil imports. He said, "In these testing times of COVID-19 pandemic, this fall in oil prices will help in saving funds to carry on fight against Coronavirus."
Speaking on the crude oil price, Amit Sajeja, Research Analyst at Motilal Oswal said, "Currently, global oil price has strong support at $15 per barrel while it has strong resistance at around $23-25 per barrel. The oil price in international market is expected to remain in this range till Coronavirus fear exists and this fear is expected to exist at least for one more month from now."
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On OPEC nations mulling to cut down oil production, Anuj Gupta said, "When the demand for oil has gone down 40 per cent, even OPEC countries cutting oil production won't work because they are mulling reduction in production by only 10 per cent. This won't be enough to pare the demand-supply constraint emerging in the global oil market."
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