US oil prices tumbled again on Tuesday after the June contract of WTI crude on the NYMEX saw its second-lowest settlement on record falling nearly 19 per cent amidst a supply glut and storage concerns.

At the time of reporting, the June WTI crude was at $11 per barrel lower by 18.08 per cent from its previous close. Previously, the June Contract of WTI hit the mark of $10.24 per barrel lower by 19.87 per cent.

The latest plunge in US oil prices comes on the back of renewed concerns of decline storage capacity as supply continues and demand continues to be at a standstill.

Around a week ago, the WTI crude in the US fell below zero for the first time ever.

The decline continues even after the Organization of Petroleum Exporting Countries (OPEC) and its allies agreed to cut their outputs. Initially, there were hopes that agreement would stabilise oil prices, but with the Covid-19 pandemic continuing, the gap between the supply and demand has increased vastly and is not allowing oil prices to rise.

The price of oil has now reached a point that it is increasingly becoming difficult for higher cost producers to remain in operation and rather look at declaring bankruptcy. A lot of US shale producers are in deep trouble and analysts expect that low oil price for few more months will result in a spate of bankruptcies in the US.

With world demand now forecast to plunge by over 20 million barrels per day, a 30 per cent drop from last year, analysts say massive production cuts will be needed beyond just what has been agreed between the Organization of the Petroleum Exporting Countries (OPEC), Russia and other producers.

Brent crude oil also has declined and its June contract on the Intercontinental Exchange (ICE) is at $19.21 per barrel, lower by 3.90 per cent from its previous close.

The fall in Brent prices augurs well for India as it comprises over 25 per cent of India’s imports. Rest of the Indian basket includes crude from the Gulf region, Oman, also, some crude is imported from Venezuela and nominal amount from the US.