On Tuesday, US oil prices dropped 7%, representing crude oil’s worst day and lowest closing price in almost a quarter. At one point during the day, prices were down as much as 9% with an average of $36.76 a barrel. For the first time since late June, Brent crude fell below $40 a barrel. The declines are largely driven by rising concern over how much crude oil the currently fragile world economy requires.
With the summer driving season in the US over and people refraining from flying during the pandemic, jet fuel demand remains extremely weak. Unfortunately, the current supply is up but the demand for crude oil is significantly lacking due to economic troubles as a result of the COVID-19 pandemic and lockdown restrictions still imposed over certain populations and communities. Saudi Arabia, the de facto leader of OPEC, cut its selling price to Asia and the US. Experts claim that this will worsen the situation, stating that OPEC panicked on Tuesday and put out a bad signal to the energy community.
Read More: Oil prices are collapsing after Saudi Arabia sends ominous signal
