By Srinivas Chowdary Sunkara // petrobazaar // 20th April 2020.
Brent Oil June futures contract prices are trading $1.37 lower or 4.879% at $26.71 a barrel on London based ICE futures Europe exchange. WTI oil May contract futures dived around 40% or $7.11 at $11.17 at the time of reporting. WTI contract for June delivery, which expires in May is trading at a discount of $2.14 or 8.55% at $22.89. In Shanghai, crude oil main contract futures dropped by 9.3 Yuan or 3.69% to 242.8 Yuan/barrel while MCX crude oil front month contract futures plunged Rs.452 to close at Rs.965 while the spread between current month and second month contract is widest at Rs.807.
The world crude oil price indexes plummeted in a row as the oil prices remain under pressure due to continuing demand destruction by the coronavirus pandemic that has halted the global economic activity. Another issue that is weighing on oil prices is the storage issue. There is a lot of oil in water that is going to refineries that do not need it that shows the demand supply imbalance. Analysts are in the opinion that there is no anticipation of near term recovery in oil prices unless there is sign of people start to drive that can create gasoline demand as the gasoline demand is the key driver to oil prices. OPEC group agreed to historical supply cuts could provide floor to oil prices not to fall further. On the other hand, Analysts says that the numbers that are shown on the screen for WTI May contract are not really very relevant or informative as the most of the traders are shifted from existing May contract, which expires on Tuesday , to June contract. Traders are looking for recovery in the coming days. Good day to all.
Disclaimer: Views and opinions expressed here are personal. This commentary is for information purposes only and not an offer or a solicitation to sell or buy any physical commodities or financial instruments. The views and analysis are based on reliable public information available at the time of writing. This report and its content cannot be copied, redistributed or reproduced in part or whole without the prior written permission of petrobazaar.com