The world could soon be drowning in oil

Oil hit an 18-year low this week. And we could even see oil prices turn negative.

“Wars have been fought for it,” says Spencer Jakab in The Wall Street Journal. Yet now “nobody wants oil”. As much of the world remains under lockdown, around a fifth of the world’s oil production isn’t being used.

Oil prices hit an 18-year low this week, with Brent crude down to $23a barrel and US WTI futures dipping below $20 a barrel. Prices have more than halved over the last month. Large swathes of the global economy are closed, says Caroline Bain for Capital Economics. That could mean an “unprecedented 10% year-on-year plunge in global oil consumption” in the second quarter. Meanwhile, on the supply side, output is increasing as one-time allies Riyadh and Moscow try to outproduce each other in an all-out battle for market share.

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Markets editor

Alex is an investment writer who has been contributing to MoneyWeek since 2015. He has been the magazine’s markets editor since 2019. 

Alex has a passion for demystifying the often arcane world of finance for a general readership. While financial media tends to focus compulsively on the latest trend, the best opportunities can lie forgotten elsewhere. 

He is especially interested in European equities – where his fluent French helps him to cover the continent’s largest bourse – and emerging markets, where his experience living in Beijing, and conversational Chinese, prove useful. 

Hailing from Leeds, he studied Philosophy, Politics and Economics at the University of Oxford. He also holds a Master of Public Health from the University of Manchester.