Oil price sinks and FTSE 100 volatile as coronavirus recession hits demand – business live

Oil price sinks and FTSE 100 volatile as coronavirus recession hits demand – business live

Global oil producers have begun shutting down their oil rigs on the largest scale in 35 years as the coronavirus continues to drive market prices to their lowest level since 2002.. In Canada the price of a barrel of oil fell below the cost of shipping it to a refinery - $5 - making it more economic for producers to shut down their wells than plummet to "negative prices".. It is right we extend the pause in operations.. Goldman Sachs have predicted that oil companies will be forced to cut down wells in their, because demand is slumping due to the coronavirus.. In the short term, production sites - particularly on-shore, will be turned off, they write, as the oil transportation network is already being overwhelmed by surplus stock.. Given the cost of shutting down a well, a producer would be willing to pay someone to dispose of a barrel, implying negative prices in landlocked areas.. But in the long-term, this disruption could actually lead to an (eventual) spike in prices, as the industry won't be able to boost production fast enough when demand comes back.. Oil is still suffering - with Brent crude down over 8%