By Srinivas Chowdary Sunkara // petrobazaar // 22nd April 2020.
Today, Brent oil futures price for June delivery is trading 44 cents or 2.3% higher at $19.77 per barrel on London based ICE futures Europe exchange. West Texas intermediate futures contract to be delivered in June rose $1.39 or 12% to trade at $12.95 per barrel at the time of reporting. Last night Brent logged in 43.37% loss at $11.57 while WTI registered 24.4% slump in prices at $11.7 per barrel. In Shanghai, crude oil main contract futures dropped by 23.5 Yuan or -10.04% to close at 210.6 Yuan/barrel. In India, MCX crude oil futures for May delivery tanked Rs.387 or 30% to close at Rs.937 today. Brent premium over WTI widened to $8.08 a barrel during today's session.
The world crude oil benchmark futures price indexes continued to fall in the early trading hours while both the indices jumped over 10% paring the steep losses after a volatile over trading session which saw brent fall to its lowest levels in more than 20 years. Oil traders are more worried about the unavailability of the storage to fill the oil and finding all means to fill ships, rail cars, caverns and pipelines to store fuel.
Now market is looking at the news of video conference among some of the OPEC+ delegates to discuss further steps to take to tackle the current supply glut. Speaking after the conference, Thamir Ghadhban is in the opinion that any new measures will be in coordination with producers outside the 23 -country coalition. IEA executive director Fatih birol urged all the participating countries to kick off production cuts at the earliest and further suggested to consider deeper cuts than those agreed by the group to prop up oil prices. Bijan Nambdar Zangeneh agreed to speed up the production cuts process and to be serious on compliance. It is heard that the meeting discussed the possibility of bringing farward the start date of the production cuts from May1st. Decision is on hold due to absence of defacto leaders and other key members.
Turning to data side, API reported that U.S crude supplies rose by 13.2 Mb. Gasoline and distillates stocks climbed by 3.4 Mb and 7.6Mb. EIA will confirm the numbers later today. Consensus is on large build in both crude and product stocks in U.S. I strongly feel that demand restoration and quick commencement of production cuts are the only factors that can keep floor for falling oil prices. Good day to all.
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