The unprecedented outbreak of COVID- 19 has shaken the global economy and global crude oil prices have been declining exponentially. US crude oil prices went below $0 on Monday, for the first time in history. The Corona Virus pandemic has caused a steep decline in demand for crude oil across the globe due to the Lockdowns that are in place.
The demand is so low that countries that produce oil do not have enough storage space to stock oil supplies and the price will only continue to decline if the spread of the pandemic continues. Companies have already cut down their production by a historic 9.7 million barrels per day as per the agreement signed between Organization of Petroleum Exporting Countries (OPEC) and its allies. Shares of energy and oil firms have fallen very badly.
According to report from India Today, experts suggest that if COVID- 19 pandemic continues to worsen, crude oil might soon become a worthless commodity. The situation was so bad in US, that sellers had to pay buyers to buy the supplies.
The crude oil prices are very low and this could be the best time for India to buy supplies since it could be Lucrative. However, India has already purchased crude oil and almost all its tanks are full. India too has seen a fall in demand for crude oil due to the COVID- 19 outbreak. Therefore, despite, prices being low, India is unlikely to buy crude oil. Hence, the falling prices does not really benefit India.
If the global lockdown extends for a few more months, the crude oil industry could be affected gravely.
