* Brent slips below $19 a barrel
* WTI continues slide to around $10
* Storage woes weigh as traders hunt for ships
(Adds comment from analysts and Russian minister. Changes
dateline)
By Bozorgmehr Sharafedin
LONDON, April 28 (Reuters) - Oil prices plunged for a second
day in a row on Tuesday on concerns about dwindling global
capacity to store more crude and fears that demand may be slow
to recover even after countries ease restrictions to combat the
coronavirus pandemic.
Brent crude fell 83 cents, or 4.1%, to $19.16 a
barrel at 0808 GMT, following a 6.8% slide on Monday.
U.S. West Texas Intermediate (WTI) crude was down
$2.57, or 20%, at $10.21 a barrel. The contract plunged 25% on
Monday.
Analysts said part of the WTI decline was due to retail
investment vehicles like exchange-traded funds selling out of
the front-month June contract and buying into months later to
avert massive losses like last week, when WTI fell below zero.
The United States Oil Fund LP (USO), the largest
oil-focused U.S. exchange-traded product, said it would further
shift its holdings into later-dated contracts.
"The exodus in our view remains motivated by concerns over
the saturation of storage capacity at Cushing and the associated
risk of negative pricing," Harry Tchilinguirian, global oil
strategist at BNP Paribas, told the Reuters Global Oil Forum.
Although the world economy may start to recover as more
countries allow businesses to reopen, analysts say prospects for
oil prices remains gloomy with so much crude in storage and
supply cuts still not deep enough to counter plummeting demand.
"While we expect oil demand to modestly recover from the
April lows as countries ease some lockdown measures, demand will
remain under severe pressure in the near term because of the
COVID-19 pandemic," said UBS commodities analyst Giovanni
Staunovo.
BP Chief Executive Bernard Looney told Reuters his
firm expected global oil demand to drop by about 15 million
barrels per day (bpd) in the second quarter due to
coronavirus-related movement restrictions.
That is more than the 10 million bpd of cuts agreed by the
Organization of the Petroleum Exporting Countries, Russia and
other allied producers. The reductions are due to be implemented
from May 1.
Russian Energy Minister Alexander Novak said on Tuesday oil
markets would start balancing out once an output deal took
effect, but no significant rise in prices was likely in the near
future due to high levels of global storage.
Global storage onshore was estimated to be about 85% full as
of last week, according to data from consultancy Kpler.
In a sign of the energy industry's desperation for places to
store petroleum, oil traders are resorting to hiring expensive
U.S. vessels to store gasoline or ship fuel overseas, shipping
sources said.
(Reporting by Bozorgmehr Sharafedin in London; Additional
reporting by Sonali Paul in Melbourne and Koustav Samanta in
Singapore; Editing by Edmund Blair)