Oil prices sank on Tuesday as concerns over a global supply glut weighed on the market.
The West Texas Intermediate for May delivery decreased 2.45 U.S. dollars to settle at 23.63 dollars a barrel on the New York Mercantile Exchange, while Brent crude for June delivery dropped 1.18 dollars to close at 31.87 dollars a barrel on the London ICE Futures Exchange.
The U.S. Energy Information Administration on Tuesday forecast that the worldwide COVID-19 pandemic and increase of oil supply will keep global crude oil prices at multi-year low averages through the first half of 2020.
Traders were also cautiously awaiting a key meeting by major oil producers.
The Organization of the Petroleum Exporting Countries and its allies, including Russia, are expected to hold a video conference on Thursday to discuss oil output cuts.
Even concerted action by all the major oil exporters would not be able to offset the massive slump in demand in the short term, as the scale of the decrease, being at least 20 million barrels per day due to the pandemic, is simply too big, analysts at Commerzbank Research said in a note on Tuesday.
Nonetheless, a demonstration of unity and resolve among oil producers would certainly help stabilize and normalize the oil market and at least stop oil storage facilities from "overflowing" in the short term, they added.
Editor:Cherie
