A slump in oil prices is normally a cause for celebration in gas-guzzling nations. The average American burns through 10 litres of oil or oil products per day in normal times. That will mean for the average person, a fall in oil prices is a good thing. As for oil-producing countries, not so much. such a drop in the cost of crude can spell disaster, and hardship for millions.
The UK benchmark for oil has slumped once again 10% to around $16 (£13) a barrel in another day of declines. when the price of West Texas Intermediate (WTI), the benchmark for US oil, fell below zero for the first time ever earlier this week, it went downhill firm there
This steep decline shows just how dependent the economy is on the oil industry. Economic activities as drastically slowed down.
One of this effect has been a supply glut and a worldwide shortage of storage space for oil. The collapse in physical demand for crude products like petrol and jet fuel has left storage hubs at capacity or, as one trader put it: “They’re close to the brim.”
“With oil demand virtually non-existent, this quite amazing sell-off is almost entirely down to fears over storage.” James McNally of Third Bridge Group
“In theory, petrol prices could fall below £1 per litre if the lower wholesale costs were reflected at the pumps – but at the same time, people are driving very few miles, so they’re selling vastly lower quantities of petrol and diesel at the moment,” pointed out RAC fuel spokesman Simon Williams.