WTI falls by nearly 5% on the day in a drop below $19
That’s fresh lows for oil since 2002, as the $19 level looks to be giving way now and that could open up a really slippery slope for oil as prices hits the teens.
There is not much precedent at this stage so if anything, I would argue that sentiment is everything. Much like the drop towards $40 and then much more during the coronavirus crisis, it is starting to turn into one of those ‘don’t catch a falling knife’ scenarios.
The output cuts deal between OPEC+ and other international producers will only go into effect on 1 May, so in the meantime the market will still be flushed with supply and the situation will also stay that way for many more months to come.