London (AFP)

The price of American oil revived with its demons and plunged Monday, to the point of dropping almost 30%, ballasted by a plethoric offer and a storage of crude oil at the limits soon reached, against the backdrop of a coronavirus pandemic.

The price of a barrel of WTI cracked even as it remained on four consecutive sessions of increase, after a collapse at the beginning of last week.

Last Monday, it had an unprecedented session in the history of the oil market, the previous contract for delivery in May closing at -37.63 dollars per barrel.

But if this Monday he was still far from these abysses, he nevertheless accused a severe plunge.

Around 2:40 p.m. GMT (4:40 p.m. in Paris), the American barrel of WTI for delivery in June fell 26.21% compared to the closing of Friday, to 12.50 dollars, after having touched a minimum at 11.88 dollars.

A barrel of Brent North Sea crude for June was worth $ 19.62 in London, down 8.49%, after touching earlier in the session $ 19.50.

This market orientation reflects concerns about "crude storage levels, which are increasing" and are approaching their limits as well as about future cuts in producing countries, "which do not meet the real needs of the market", commented Bjornar Tonhaugen, analyst at Rystad Energy.

The oil producing countries united within the Organization of the Petroleum Exporting Countries (OPEC) and their partners agreed in April to reduce their production by some ten million barrels per day from May, but the demand deficit caused by the Covid-19 pandemic could represent a volume more than twice as high.

As a result, reserves of black gold are filling up at full speed and could reach their maximum within a few weeks according to several analysts, a chain reaction which weighs even more on crude oil prices.

- American rescue -

In this context very unfavorable to prices, oil prices "no longer really need a trigger to dive", said Craig Erlam, of Oanda.

The analyst underlines the return on Monday of high volatility, a sign of nervousness among investors, "when it seemed to have calmed down somewhat at the end of last week".

"If demand does not resume in May, it is likely that prices will fall again into the negative as the next delivery date approaches," said Hussein Sayed, analyst at FXTM.

However the resumption of activity promises to say the least complex, European countries approaching the crucial stage of deconfinement in a dispersed order and sometimes in controversy.

On the other side of the Atlantic, US Treasury Secretary Steven Mnuchin said Sunday that the US administration plans to lend to oil companies to save the industry, which has been hurt by low prices.

Lending money to energy companies is an option "that we are studying closely," he said on Fox News.

President Donald Trump announced on Tuesday that he had asked his administration to set up an emergency aid plan for the oil and gas industry.

© 2020 AFP