CORONAVIRUS

Oil Plunges 25% As Another Virus-Fueled Trading Week Begins

Mar 8, 2020, 9:40 PM

FILE: A gas flare from the Shell Chemical LP petroleum refinery illuminates the sky on August 21, 2...

FILE: A gas flare from the Shell Chemical LP petroleum refinery illuminates the sky on August 21, 2019 in Norco, Louisiana. (Photo by Drew Angerer/Getty Images)

(Photo by Drew Angerer/Getty Images)

NEW YORK (AP) — Oil prices are plunging amid concern a dispute among producers could lead a global economy weakened by COVID-19 to be awash in an oversupply of crude.

Brent crude, the international standard, lost $11.44, or 25.3%, to $33.83 per barrel in electronic trading in London. Benchmark U.S. crude fell $10.77, or 26.1%, to $30.49.

The dramatic losses follow a 10.1% drop for U.S. oil on Friday, which was its biggest loss in more than five years. Prices are falling as Saudi Arabia, Russia and other oil-producing countries argue how much to cut production in order to prop up prices.

The turmoil in the oil markets caused share prices to plunge in the Middle East and in Asia. While lower oil prices can be a boon for economies that rely heavily on imports to fuel their industries, such as South Korea, Japan and China, extreme uncertainty can wreak havoc.

Demand for energy is falling as people cut back on travel. The worry is that the new coronavirus will slow economies sharply, meaning even less demand.

Stephen Innes, chief markets strategist at AxiCorp, called reports that Saudi Arabia could increase its oil production in order to gain market share in a “shock-and-awe” strategy.

The oil market has seen arguments like this before. In 2014, OPEC held off production cuts in order to hold onto market share in the face of a resurgent U.S. oil industry. That led to oil to tumble from over $100 a barrel to below $40 by 2015.

This most recent plummet for oil adds another punch to what’s already been a brutal and dizzying couple weeks for financial markets worldwide. The U.S. stock market is down 12.2% since setting its record last month on worries about how much corporate profits will fall because of COVID-19. It’s set on Monday to mark the 11th anniversary of hitting bottom after the 2008 financial crisis.

Treasury yields have plummeted to record lows as investors pile into anything that looks safe, almost regardless of how little it pays. The 10-year Treasury yield pierced below 1% for the first time on Tuesday, only to breach 0.70% Friday.

The virus usually leaves people with only mild to moderate symptoms, but because it’s new, experts can’t say for sure how far it will ultimately spread and how much damage it will do, both to health and to the economy. The number of cases has reached 109,000 globally, and Italy on Sunday tried to quarantine a region holding more than a quarter of its population in hopes of corralling it.

If the number of new infections slows in other parts of the world as it has in China, if the U.S. jobs market remains as solid as it’s been and if all the unease in markets ends up creating just a short-term dip in confidence among shoppers, all this may recede quickly. But those are a lot of potential pain points.

“There are more if’s than at any other time in this 11-year bull market,” say strategists at BTIG.

KSL 5 TV Live

Coronavirus

FILE: Former Utah Jazz John Stockton reacts during a 76-70 Wichita State win over the Gonzaga Bulld...

Michael Houck

Former Utah Jazz star John Stockton sues Washington medical director about COVID misinformation policy

Former Utah Jazz superstar John Stockton has filed a federal lawsuit against Washington officials on First Amendment violations, arguing the state's policy of COVID-19 misinformation is unconstitutional.

16 days ago

Deer Creek Reservoir...

Alex Cabrero

State parks expecting another record visitation year, hiring more workers

It didn't matter how cold or snowy it was at Deer Creek State Park Friday afternoon. Nothing was going to stop Leonard Sawyer from taking his boat out to do a little fishing.

1 month ago

FILE —  Respiratory virus illness activity continues to increase across the US.
(Joe Burbank/Orl...

Emma Benson

‘Not viruses to mess around with’: Experts urge caution during ongoing ‘tripledemic’

Experts say though not as severe as last year, this winter we're seeing another "tripledemic" – rising cases of COVID-19, flu and RSV in Utah.

3 months ago

FILE - COVID-19 antigen home tests. (AP Photo/Patrick Sison, File)Credit: ASSOCIATED PRESS...

Emma Benson

‘The ICUs are full:’ Keep yourself and others healthy this holiday

It's time for holiday gatherings, but with more people around us comes a greater risk of getting sick.

3 months ago

Julianna Preece goes through the mountain of medical documents she's acquired for her health condit...

Lauren Steinbrecher

Herriman couple is suing CVS, says 5x Covid vaccine dose mistake caused health problems

A couple is suing a Utah CVS vaccination clinic, saying a nurse’s mistake led to the wife receiving five times the normal COVID-19 vaccine dose and caused serious health issues she’s still dealing with today.

4 months ago

FILE - COVID-19 antigen home tests. (AP Photo/Patrick Sison, File)Credit: ASSOCIATED PRESS...

Associated Press

More free COVID-19 tests from the government are available for home delivery through the mail

Americans can order more free COVID-19 tests online for home delivery.

4 months ago

Sponsored Articles

Women hold card for scanning key card to access Photocopier Security system concept...

Les Olson

Why Printer Security Should Be Top of Mind for Your Business

Connected printers have vulnerable endpoints that are an easy target for cyber thieves. Protect your business with these tips.

Modern chandelier hanging from a white slanted ceiling with windows in the backgruond...

Lighting Design

Light Up Your Home With These Top Lighting Trends for 2024

Check out the latest lighting design trends for 2024 and tips on how you can incorporate them into your home.

Technician woman fixing hardware of desktop computer. Close up....

PC Laptops

Tips for Hassle-Free Computer Repairs

Experiencing a glitch in your computer can be frustrating, but with these tips you can have your computer repaired without the stress.

Close up of finger on keyboard button with number 11 logo...

PC Laptops

7 Reasons Why You Should Upgrade Your Laptop to Windows 11

Explore the benefits of upgrading to Windows 11 for a smoother, more secure, and feature-packed computing experience.

Stylish room interior with beautiful Christmas tree and decorative fireplace...

Lighting Design

Create a Festive Home with Our Easy-to-Follow Holiday Prep Guide

Get ready for festive celebrations! Discover expert tips to prepare your home for the holidays, creating a warm and welcoming atmosphere for unforgettable moments.

Battery low message on mobile device screen. Internet and technology concept...

PC Laptops

9 Tips to Get More Power Out of Your Laptop Battery

Get more power out of your laptop battery and help it last longer by implementing some of these tips from our guide.

Oil Plunges 25% As Another Virus-Fueled Trading Week Begins