U.S. oil prices hit 21-year lows as demand disappears

U.S. oil prices have tumbled to levels not seen since 1999 as demand for crude disappears.

Julian Satterthwaite reports.

U.S. oil prices are at levels not seen since 1999.

Monday (April 20) saw the country’s benchmark crude drop by around a fifth to less than 15 dollars per barrel.

That’s down from over 60 dollars at the start of the year.

The collapse comes as demand evaporates, and the amount of oil in storage piles up.

Analysts say the U.S. 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 U.S. reference price.

The global oil industry has been cutting output in the face of an estimated 30% drop in demand.

Production cuts of almost ten 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.