* Russia, U.S. officials to discuss energy markets
* Biggest weekly crude stockbuild at Cushing in 10 yrs
-Genscape
* High-cost producers have to shut production -analysts
* Bank of America cuts Brent, U.S. crude price forecasts
* Interactive graphic on fall of prices: https://reut.rs/39ieums
(Updates, adds details on Texas production)
By Scott DiSavino
NEW YORK, March 30 (Reuters) - Global oil benchmark Brent
crude plunged to its cheapest level in almost 18 years on Monday
and U.S. crude briefly tumbled below $20 a barrel as investors
faced the growing prospect that the global coronavirus shutdown
could last for months, further squeezing demand for fuel.
The pandemic is expected to cause at least a 20% drop in
fuel demand worldwide as governments take steps to restrict the
spread of the virus. With Saudi Arabia and Russia set to flood
the market with oil next month, producers and shippers have also
been scrambling to lock oil up in storage as demand falls.
Brent LCOc1 futures fell $2.17, or 8.7%, to settle at
$22.76 a barrel, the lowest close since November 2002, while
U.S. West Texas Intermediate (WTI) crude CLc1 fell $1.42, or
6.6%, to $20.09, the lowest close since February 2002.
Global commodities trader Trafigura said oil demand could
fall by more than 30 million barrels per day (bpd) in April,
nearly one-third of daily fuel consumption. The price war between Saudi Arabia and Russia erupted
earlier this month after the collapse of a three-year deal to
limit supply between the Organization of the Petroleum Exporting
Countries (OPEC) and other producers led by Moscow.
So far, negotiations between the two producers and the
United States have not changed the outlook. Saudi Arabia said on
Monday it planned to boost oil exports to 10.6 million barrels
per day (bpd) from May.
Major crude benchmarks have recorded losses for five
straight weeks. The price of oil is now so low that it is
becoming unprofitable for many oil firms to remain active,
analysts said, and higher-cost producers will have no choice but
to shut production, especially since storage capacity is almost
full.
Texas shale producers, Pioneer Natural Resources and Parsley
Energy formally asked Texas regulators on Monday to curtail oil
production for the first time in nearly 50 years. Declining demand and swiftly filling storage have squeezed
prices for major U.S. grades of crude - some to around $11 a
barrel. CRU/C
"It appears that the Saudis are on a mission to drive
marginal U.S. producers off of the playing field in re-capturing
market share," said Jim Ritterbusch, president of Ritterbusch
and Associates in Galena, Illinois.
U.S. President Donald Trump and Russian President Vladimir
Putin agreed during a phone call to have their top energy
officials meet to discuss slumping global oil markets.
The market added to earlier losses after traders said
Genscape reported that U.S. stockpiles at the key Cushing
storage hub in Oklahoma rose more than 4 million barrels last
week, which was the biggest-one week increase in more than 10
years.
Bank of America lowered its oil price forecasts for the
second time in two weeks after the bank's economists projected
global GDP would contract in the first half of 2020.
"On a quarterly basis, we expect to see the steepest decline
in global oil consumption ever recorded," BofA analysts said,
reflecting a 12 million-bpd drop in the second quarter of 2020
and a 4.5 million-bpd contraction for the year.
BofA reduced its 2020 price forecasts to $37 per barrel for
Brent and $32 for WTI and said it expected both benchmarks would
trade in the teens in coming weeks.
Supertanker freight rates are rising for a second time this
month as traders rush to secure ships for storage. Goldman Sachs analysts said demand from commuters and
airlines, which account for about 16 million bpd of global
consumption, may never return to previous levels.
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oil prices IMAGE https://reut.rs/2Jt3Dvm
Estimated 2020 cash costs for oil fields png https://reut.rs/33NLWjy
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