It's a classic question of supply and demand. Oil is no longer being demanded at the rate which it once was. This, coupled with the fact that Saudi Arabia and Russia, two of the world's largest oil suppliers, increased production rates throughout 2020 due to them being competitive market. In fact, Saudi Arabia was predicted to increase oil production over 25 percent since January 20th, and that they did.
Thus, with both these factors in mind, the price of oil plummeted from 68 dollars a barrel to 23 dollars a barrel in mid-April. On April 22, the oil price hit an all-time low at 20 dollars a barrel. Since then, the price of oil has been steadily rising, back up to 25 dollars a barrel, but with states opening back up due to COVID-19 as well as extended fears over the virus, experts are unsure of their predictions.
Overall, I think this is an interesting situation to analyze especially in this class. We are seeing the dramatic shifts in demand curves due to COVID-19 lowering many people's incomes, especially for normal goods. I guess it's history we're living through.
Sources:
https://www.cnbc.com/2020/04/01/5-charts-that-explain-the-saudi-arabia-russia-oil-price-war-so-far.html
https://capital.com/oil-price-analysis-in-april-2020
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