The historic oil crash below zero looked more and more like an aberration, as the June contract rose for a fourth day during its last trading session before it expired.
Amidst growing signs of a nascent recovery in demand, worsening production cuts and optimism that the world is approaching the search for a vaccine for thecoronavirus, New York futures contracts increased by about 1% $ 32 a barrel. The much more active July contract increased slightly.
With an open interest in the June futures contracts to a fraction of the subsequent months and the storage facilities in the United States that are no longer full to the brim, a repeat of the collapse that sent the West Texas Intermediate contract out of first month to almost $ 40 a barrel below zero seemed unlikely. In another sign, traders are not worried about a sharp fall, the premium to pay for the offsets on the WTI compared to the calls fell to the lowest since the beginning of March, just before the start of the war of the price.
Chinese oil use almost returned to pre-virus levels, while jump in IndiaFuel sales show the worst could be out there as the lockout restrictions are relaxed. Italians have been allowed to return to restaurants and New York isis slated to open a sixth region, with some of the hardest hit regions in Europe and North America continuing to recover their economies. Crude oil also received a boost on Monday after US biotech company Moderna Inc. said itsthe vaccine has shown that it can create an immune system response to the virus.
On the supply side,U.S. shale oil production, the world’s largest producer, is expected to drop to a low since late 2018 next month, according to the Energy Information Administration. There have also been“A staggering reversal” in OPEC + shipments so far in May, intelligence firm Kpler said after the alliance’s agreement to curb production started earlier this month.
“Optimism is expressed in all markets, not only oil but base metals are rallying and we are seeing good support from the stock markets,” said Michael McCarthy, chief market strategist at CMC Markets Asia Pacific. However, “the markets may be ahead of the facts thinking that the savings will quickly be back on track once the foreclosure measures are lifted” and there is a risk that WTI may fall in the short term, he said. declared.
WTI for June delivery increased 1.4% to $ 32.25 a barrel on the New York Mercantile Exchange at 7.41 a.m. in London, while the more active July contract added 0.6% to $ 31.83. The contract for the first month settled above that of July Monday for the first time since January, signaling that concerns about storage capacity in the United States have subsided.
Brent crude for July settlement rose 0.3% to reach $ 34.91 a barrel on the ICE Futures Europe stock market after gaining 7.1% on Monday. The crude oil benchmark trades at a $ 3.08 WTI bonus for the same month.
Demand for Chinese oil has dropped to around 13 million barrels a day, according to leaders and traders who monitor the country’s consumption. This was just under 13.4 million barrels per day in May 2019 and 13.7 million barrels per day in December. The overall number would be higher without the demand for kerosene, which is still well below the level of the previous year, they said.
|More news on the oil market|
– With the help of Dan Murtaugh