The Australian share market has closed lower, with steady losses through the session worsening after some bleak economic forecasts from Reserve Bank governor Philip Lowe.
- The ASX 200 closed 2.5 per cent lower at 5,221 points, with losses across all sectors of the market
- The Australian dollar fell to 63.2 US cents
- WTI crude futures plunged to a record low -$US40/barrel overnight
The losses also follow US oil prices falling below zero for the first time in history, underscoring the chaos the COVID-19 pandemic has unleashed on the global economy.
US oil prices crashed to unprecedented lows Monday as futures in New York ended in negative territory for the first time amid a devastating supply glut that has forced traders to pay others to take the commodity.
With space to store oil scarce, US benchmark West Texas Intermediate for May delivery ended trading at -$37.63 a barrel ahead of Tuesday’s close for futures contracts – when traders who buy and sell the commodity for profit would have had to take physical possession of it.
“It’s a contract for something that nobody wants to buy,” said Matt Smith of ClipperData.
The remarkable decline comes as the petroleum industry emerges as one of the corners of the global economy made most vulnerable by government shutdowns to limit the spread of coronavirus.
The commodity has been further weakened by a battle for market share that raged much of the spring between Saudi Arabia and Russia.
A deal announced last week between OPEC and its peers to cut production by about 10 million barrels per-day from May appears not to have been enough, while the closely-monitored storage capacity at Cushing, Oklahoma was almost full as of Monday morning.