Oil prices have plummeted to their lowest levels in almost two decades as the coronavirus pandemic hits demand.
Brent Crude oil prices fell below $23 a barrel on Monday before rising slightly as the day went on.
By comparison, Brent Crude was selling for around $66 a barrel at the start of the year, according to Oilprice.com.
WTI Crude is facing similar falls, with the price of a barrel sitting not far above $20 at times on Monday.
The price drops come as travel restrictions across the world come into force in an effort to stem the spread of Covid-19. The restrictions mean that jet fuel and petrol are simply not being purchased.
This leads to the issue of where producers can store all their oil, which could see them putting a cap on output.
Global head of market strategy at Westpac, Robert Rennie, told FT that a continuation of the current situation could lead to oil producers paying for their crude to be taken away.
He said: “You’re getting closer to the point where you begin to run out of storage capacity – be that tanks, pipelines or crude carriers.”
Goldman Sachs analysts said that the magnitude of the oil shut-ins “will be likely to permanently alter the energy industry and its geopolitics,” the Telegraph reported.
As well as travel restrictions, an oil price war between Russia and Saudi Arabia is causing further price drops.
Lower oil prices may result in cheaper petrol in western societies, which could result in cheaper costs of living and an economic boost.
However, price drops can cause very real issues for countries that rely on producing it for their income.
The oil industry isn’t the only one that has been affected by the Covid-19 pandemic.
The FTSE 100 – a stock market index based on the value of the biggest 100 companies in the London Stock Exchange – fell below 5,000 for the first time since 2011.
Meanwhile the US equivalent – the Dow Jones Industrial Average, fell sharply from nearly 30,000 to around 18,600 last Monday.
Big shifts in stock markets can have tangible effects on the livelihood of ordinary working people.
Often, money stored in ISAs and pension funds is invested in the economy with the aim of growing the amount of money stored in them.
Conversely, economic crashes such as this can cause people to lose money in their pension pots depending on their scheme.
It is unclear when or how world markets will recover, as it depends on how soon countries can re-open for business following pandemic lockdowns.
US President Donald Trump had previously stated that his administration would look at relaxing the US’ pandemic measures as early as Easter.
This has now been extended until 30th April, according to reports. The US currently has more than 163,000 confirmed cases of coronavirus – more than any other country.
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