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Oil prices likely to drop Rs15 as crude oil dives to 22-year low at $11
An employee serves oil at a petrol station still opened during a strikeon December 11, 2012 in Rome. The strike of petrol stations in Italy started the day before at 7 PM and will last until December 14 at 7 PM. AFP PHOTO / ANDREAS SOLARO / AFP PHOTO / ANDREAS SOLARO

Oil prices likely to drop Rs15 as crude oil dives to 22-year low at $11

ISLAMABAD: As the oil prices dived to 22-year lows at just $11 after crashing almost 40 percent in a market flooded with crude and slammed by evaporating demand in the face of the coronavirus pandemic, the experts said that the price of petroleum products in Pakistan are likely to drop Rs15 per litre.

According to details, the US benchmark West Texas Intermediate (WTI) crude for May delivery tanked to $11.04 – the lowest level since 1998.

The collapse comes as demand evaporates, and the amount of oil in storage piles up. Analysts say the US may simply run out of places to put surplus crude, forcing producers to cut back.

International benchmark Brent crude has fared better. Though also down, at over 27 dollars a barrel it’s now almost twice the US reference price.

The global oil industry has been cutting output in the face of an estimated 30% drop in demand. Production cuts of almost 10 million barrels per day by OPEC nations and allies will kick in from May.

Saudi Arabia says worldwide cuts could ultimately total twice that amount. But as lockdowns halt the global economy, even that may not be enough to rescue oil prices.

Economic experts in Pakistan said that the prices of fruits, vegetables and other commodities may decrease during the holy month of Ramazan if the government announced Rs15 per litre reduction in diesel prices.