Oil prices
in the United States rose on Wednesday after falling below zero for the first
time at the beginning of the week as markets flooded crude oil due to the collapse in demand caused by the Coronavirus.
The US West
Texas Intermediate index for June delivery jumped nearly 10 percent to $ 12.68
a barrel reducing its gains by about 20 percent at the opening of Asia.
West Texas
Intermediate crude for May collapsed on Monday to an unprecedented low of less
than $ 40.32 as traders rushed to sell it before the contract ended on Tuesday,
but they found few buyers with storage capacity that quickly filled up.
Negative
prices mean that traders were forced to pay to remove oil from their hands.
European
benchmark Brent crude for June delivery rebounded by more than two percent at
the open, but reversed its gains and was trading lower by nearly three percent,
with a barrel trading at $ 18.73.
It decreased
to at least 18 years the previous day.
Stephen
Ennis, chief market strategist at AxiCorp said that traders are buying at
bargain prices and markets have received support after discussions between the
major producers.
Several OPEC
member states, as well as some allies of the OPEC + group, held a conference call
on Tuesday to discuss the dramatic situation in the oil markets.
But it was
unclear whether the OPEC leadership Saudi Arabia had participated while the
Russian Energy Minister had not.
The profits
were taken after the OPEC + coalition held an unscheduled conference call
overnight said, Ines.
The market
is under intense pressure due to an increase in supply due to travel
restrictions and restrictions worldwide to stop the spread of virus demand.
American
crude oil has been particularly affected by storage problems as WTI is
delivered at one internal point.
The crisis
was exacerbated by a price war between Saudi Arabia and Russia. They drew a
streak under conflict earlier this month and agreed along with other major
producers to cut production by nearly 10 million barrels per day to support the
virus-affected markets.
But that had
little impact as prices continued to fall as analysts expected it would not
offset the massive blow to demand.
Jingyi Pan
IG market strategist predicted prices will remain low for now.
He said in a
note publicly declining sentiments may keep prices low in the short term until
we find the light at the end of the tunnel with the gradual resumption of stalled
economic activities around the world.
0 Comments