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The WTI oil contract listing with a delivery deadline for May on Monday night was also a record $ -40.32 drop after no one wants to take over the oil as buyers just don’t know what to do with it. oil, for fear of rapid saturation of local storage. WTI, delivered in May this morning, working on part of its historic downturn, clung to positive territory.
After the historical recession, analyst reactions are coming in a row, and analysts now expect this in terms of market responses:
Goldman Sachs
According to Goldman Sachs, a similar price move is also conceivable on Tuesday, the last trading day of the WTI oil contract with the May delivery deadline. Thereafter, the physical reality of the oil market, which remains oversupplied, is likely to exert downward pressure on the WTI oil contract with a June lead time. But since the storage capacity that can be filled is limited, production will soon have to decrease substantially, creating an opportunity before prices rise as demand gradually meets.
Wood Mackenzie
Sushant Gupta, head of downstream research at Wood Mackenzie, said a historic drop in the WTI exchange rate could provide an indication of the downward pressures that other types of oil may face in light of market oversupply. oil. However, all of this also provides an opportunity for major Asian oil-consuming countries to accelerate the replenishment of their oil reserves.
OCBC
Howie Lee, an OCBC economist, emphasized that this is not the end of the world and that negative exchange rates do not reflect the general state of the market. Lee said a lack of storage space and expensive storage are unlikely to be addressed unless demand improves or the US USA Reduce your production. The moment of the reopening of the US economy. USA It remains a mystery, but the expert’s conservative estimate projected a reopening in July and beyond; adding that, at the same time, the United States is unwilling to reduce oil production through central planning because it is contrary to the ideas of capitalism.
ING Economics
The key question, according to ING, is whether all of this could be repeated when the WTI oil contract with a June delivery deadline expires next month. Storage is likely to remain on the agenda, given the oversupply environment, and negative exchange rates may return to June in the absence of a substantial recovery in demand. Another factor could put additional pressure on the WTI oil contract with a June deadline as it expires, and that is the shift in the index. Small investors have bought oil ETFs at low prices, and these ETFs have a larger open bond portfolio than usual for the June contract.
ANZ
WTI futures trading has increased in Asian trading, but ANZ analysts speculate that the June delivery deadline for the WTI oil contract could be under pressure unless there is a change on the supply side.
AxiCorp
The AxiCorp strategist said it would be too soon to see all of this as a one-time event, while closings due to the coronavirus epidemic are eased globally, while G20 countries and OPEC + producers are more likely to intervene in the market in the short term.
(Reuters)
Cover image source: Martin Divisek / Bloomberg via Getty Images
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