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© Reuters. By Peter Nurse
Investing.com – Oil markets rebounded amid volatile operations on Wednesday (22), but remained at historically low levels amid concerns about storage capacity and overproduction with no end in sight.
Today’s maximum is attributed to a tweet by the President of the United States, Donald Trump, against Iran. “I instructed the United States Navy to shoot down and destroy any Iranian gunboat if they threaten our ships at sea,” he wrote.
At 11:20 a.m. (Brasilia time), futures contracts were up 22.9% to $ 14.22 per barrel, while the international benchmark index rose 8.2% to $ 20.92, having previously fallen to $ 15.99 , the lowest level since June 1999.
The recent sharp drop in oil prices, let’s not forget that the May WTI contract hit negative territory on Monday, prompted members of the Organization of the Petroleum Exporting Countries and its allies, the group called OPEC +, to hold a meeting. Not scheduled for Tuesday. There was no immediate conclusion.
Similarly, the Texas oil and gas regulator, the Texas Railroad Commission, met Tuesday to hear arguments to potentially reduce oil production statewide, but has also not come to a conclusion.
In the latest sign of oversupply, the American Petroleum Institute reported Tuesday that US oil stocks rose 13.2 million barrels, against analyst expectations of a 13.1 million barrel increase.
The official report of the United States government offer will be released later on Wednesday.
“After a record increase of 19.3 million barrels of oil in week 15, we now expect growth of 23.6 million barrels of oil in week 16, an even more devastating blow to the already overburdened storage situation in Cushing and others “Rystad Energy analysts said in a research note.
“The oil market is in trouble and this is unlikely to happen anytime soon,” said Stephen Brennock of the PVM oil broker. “Demand is low, supply is high, and storage is full.”
Although prices rise on Wednesday, negative risks dominate, according to Danaske Bank analysts, “with limited OPEC + compliance, a slower-than-expected reopening of western economies and / or new waves of viruses that require new closings remains a major risk. “
Two figures, 30% and 23%, tell the story in a simple way, BNY Mellon said. Global demand has probably been reduced by about 30%, and OPEC + supply cuts are 23%, with a few million barrels in the Americas.
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