Crude oil futures drop at open of Asian trading

(Reuters) – Crude oil futures fell in electronic trading on Sunday evening, with U.S. futures touching levels not seen since November 2001, extending last week’s weakness on the back of sliding demand because of the COVID-19 pandemic that has killed more than 159,000 people worldwide.

The oil market has been under pressure due to a spate of reports on weak fuel consumption and grim forecasts from the Organization of the Petroleum Exporting Countries and the International Energy Agency. OPEC, in conjunction with allies, agreed to cut production by 9.7 million bpd beginning in May to stem a growing supply glut as stay-at-home orders and business furloughs sap fuel demand.

The front-month May futures contract was down 4%, or 76 cents, to $17.50 a barrel as of 6:23 p.m. EDT (2223 GMT). At one point, U.S. futures hit $17.29 a barrel, the lowest since November 2001.

That contract is expiring on Tuesday, and the June contract, which is becoming more actively traded, was down 36 cents, or 1.45, to $24.71 a barrel. Brent was also weaker, falling 15 cents, or 0.5%, to $27.93 a barrel.

The oil industry has been swiftly reducing production in the face of an estimated 30% decline in fuel demand worldwide.