Oil slips due to weak demand and price war amid pandemic

Oil continued losses on Monday as the Federal Reserve imposed an emergency rate cut to ease global financial markets that are panicked and caught in between the price war between Russia and Saudi Arabia.

Brent crude dropped $1.13, at $32.72 per barrel, following a 25% fall last week. U.S. crude was down 72 cents, at $31.01 per barrel.

The Fed cut interest rates on Sunday as its second emergency measure this month, and that it would extend its balance sheet by up to $700 billion in the next weeks.

Oil prices have been pressured by demand and supply as the pandemic threatened oil purchase and the Saudi Arabia-Russia price war threatened oversupply. These concerns added to the failed production cut agreement by the OPEC+ earlier this month.

Despite the steep decline in oil and natural gas prices, the U.S. oil drilling rig count increased to its highest since December.

U.S. oil producers are yet to be faced with concerns as the WTI nears its lowest level since 2016. Exports are estimated to decline by 1 million bpd each day in the months April and May.