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Crude prices tumbled on Monday, in step with cratering global equities after an emergency Federal Reserve interest rate cut on Sunday did nothing to stem the panic among investors triggered by the rapidly spreading coronavirus.
West Texas Intermediate crude for April delivery CL.1, -4.88% fell $1.66, or 5.2%, to $30.07 a barrel. May Brent crude BRN00, -7.56% $2.43, or, more than 7%, to $31.37 a barrel on ICE Futures Europe.
Last week, WTI fell 23%, while Brent lost 25%—with both marking their biggest weekly percentage declines, based on the front-month contracts, since December 2008, according to Dow Jones Market Data.
On Sunday, the Federal Reserve cut interest rates to nearly zero and said it would buy back $700 million of Treasurys and mortgage-backed securities.
Italy’s COVID-19 cases surged as the U.S. expanded a travel ban to the U.K. and Ireland, Germany partially shut borders, while France went into partial lockdown.
“WTI declined but found support at $30. Donald Trump pledged to buy up crude to fill the strategies petroleum reserve to the top, but this little bump hasn’t held as the effort somewhat appears like a pimple on an elephant’s backside when you consider a complete global economic meltdown and a Saudi-led price war,” said Neil Wilson, chief market analyst for Markets.com
Also stressing oil prices were some bleak numbers out of China. “Analysts had been expecting a 3.0% fall in industrial production, a 2.0% drop in fixed asset investment and a 4.0% contraction in retail sales. Instead the readings came in at -13.5%, -24.5% and -20.5% respectively,” said Connor Campbell, financial analyst at SpreadEx.
Shares of BP BP, -7.18% and Shell RDSA, -4.23% were more than 5% weaker in early trade on Monday as crude tumbled.
