oil rigREUTERS/Jim Urquhart

Oil prices continue to fall, charging toward a new 18-year low as gloomy demand outlooks persist.

US West Texas Intermediate fell 12% to $17.49 per barrel on Friday. International benchmark Brent crude declined 0.4% to $27.78 per barrel the same day. 

Oil fell further after China’s economy suffered its first contraction in 28 years. In the first quarter of 2020, gross domestic product in China fell 6.8% as the coronavirus pandemic sent a number of economic indicators lower.

In addition, a number of dismal outlooks were released this week showing that global demand for oil is expected to slump for the rest of the year. On Thursday, OPEC said global oil demand will fall to a 30-year low as coronavirus continues to crater demand. 

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The International Energy Agency also released its own gloomy forecast this week. In a Wednesday report, the agency estimated that in April, global demand will fall by 29 million barrels per day

The outlooks and further oil price declines came after OPEC agreed on historic production cuts over the weekend. The group will begin slashing production by 9.7 million barrels per day starting May 1. 

Still, as the coronavirus pandemic continues to devastate economies around the world, it appears that those cuts won’t be enough to prop up oil prices.

Oil has lost more than 70% year-to-date.

Screen Shot 2020 04 17 at 9.25.53 AMMarkets Insider

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