Oil Price Crash Drags Markets Down

Published / Last Updated on 21/04/2020

FTSE 100 index opened this morning 21st April 2020 and had fallen more than 1.7% in the first 30 minutes of trading following oil prices falling dramatically last night in the US.  At one point, oil prices staggeringly went negative.

US West Texas intermediate (WIT) hit a minus $37.68 a barrel then recovered after producers started paying buyers for barrels as the worried that storage capacity may run out in May.

Brent crude fell slightly this morning by 3.5%.

Oil prices did recover slightly but the price per barrel was still less than $2.

Royal Dutch Shell and BP, accounts for 8.4% and 8% of the FTSE 100 index, whilst BG Group accounted for a further 2.8% and Tullow Oil and Cairn Energy had a combined 1% weighting.  That's over 20% of FTSE 100 is made up by oil and petroleum firms.

Following coronavirus travel restrictions and a huge reduction in demand for fuel, 'black gold' has suffered significant damage.

In a bid to support the US drilling industry, US President, Donald Trump said he is considering stopping crude oil imports from Saudi Arabia.

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