A maze of crude oil pipes and valves is pictured during a tour by the Department of Energy at the Strategic Petroleum Reserve in Freeport, Texas, U.S. June 9, 2016. REUTERS/Richard Carson
WASHINGTON - 4 May 2020: Oil prices fell on Monday, paring last week’s gains, on worries a global oil glut may persist amid slumping demand and US-China trade tensions that could restrict an economic recovery even as coronavirus pandemic lockdowns start to ease, CNBC reported Monday.
US West Texas Intermediate (WTI) crude futures fell as low as $ 18.10 a barrel earlier in the session and were down $1.14, or 5.8 percent, at $18.64 at 0506 GMT. The benchmark contract rose 17 percent last week.
The market found support last week on signs of reduced infection rates and as major oil producers led by Saudi Arabia and Russia were set to begin cutting production on May 1.
The top two US producers, Exxon Mobil Corp and Chevron Corp, each said they would cut output by 400,000 barrels per day this quarter.
The output cuts combined with the loosening of business restrictions in some US states and cities around the world were expected to ease the global fuel glut and pressure on storage tanks, helping to drive prices up last week.
However, a threat by US President Donald Trump late last week to consider raising tariffs on China to retaliate for the spread of the coronavirus renewed fears that trade tensions could crimp an economic recovery, putting a lid on oil price gains.