KUALA LUMPUR: The ringgit continued to be lower for the third consecutive day as prospects of a further decline in oil price continued to dampen demand.
At 6 pm, the ringgit was quoted at 4.3350/3400 against the US dollar from 4.3300/3400 at the close on Tuesday.
Oil prices continued to fall with the benchmark US West Texas Intermediate oil contract hitting an 18-year low at US$19.20 per barrel, while the Brent fell to $28.38 per barrel, amid expectations of a slump in demand.
The International Energy Agency (IEA) projected global oil demand to fall by a record amount in 2020 due to the Covid-19 pandemic’s impact on economies worldwide.
It said the pandemic will erase nearly a decade of oil demand growth this year, falling by 9.3 million barrels per day (bpd) compared to 2019, assuming that travel restrictions are eased in the second half of 2020 (2H20).
For April alone, IEA said it is likely to be 29 million bpd lower than a year ago, hitting a level last seen in 1995.
Overall, IEA expects demand to gradually recover in 2H20 but will remain low.
AxiCorp global chief market strategist Stephen Innes said the production cut deal by the Organisation of the Petroleum Exporting Countries and its allies failed to address the immediate structural oversupply, leaving oil prices vulnerable.
“Markets believe the deal would not come close to offset demand devastation and is not even large enough to affect the current supply level,” he added.
Innes said the American Petroleum Institute (API) estimated a large crude oil inventory build of 13.14 million barrels for the week ending April 10 in the United States.
Meanwhile, the ringgit was traded mixed against a basket of major currencies.
It rose vis-a-vis the Singapore dollar to 3.0487/0529 from 3.0558/0639 and increased versus the British pound at 5.4270/4350 from 5.4342/4489 on Tuesday.
The local note weakened against the yen to 4.0371/0425 from 4.0290/0395 and edged lower versus the euro to 4.7390/7462 from 4.7388/7514 yesterday. – April 15, 2020, Bernama
