40 million barrels of crude oil enter the United States, US shares cut another 600 points

The West Texas June crude oil contract fell to $ 13 a barrel on the 21st after the trade. The fall in oil prices has not only impacted oil traders and killed many investors, but has also become a new battleground in the global economy.

The US market fell for two consecutive days, the Dow Jones Industrial Average fell more than 631 points, about 2.7%, and the S&P 500 index also fell 3%. However, it is worth noting that the collapse was not led by energy stocks, but by technology stocks. Giants like IBM, Google, Apple, Intel and Microsoft have seen their share prices drop. The oil traders’ panic over crude oil has begun to overflow.

(Source: Google Finance)

John Kilduff, an analyst at Again Capital, said the collapse and distortion of the oil market are driving a sharp decline in economic activity around the world. According to the “Bloomberg” news, there are 20 tankers carrying around 40 million barrels of crude oil on the west coast of the United States, and will use the latest storage space. This will be the drop that will fill the US oil shale industry. These tankers are expected to arrive in late May.

It’s still unclear who the buyers of these oils are, but even if Trump’s ban doesn’t affect these outgoing oils, more American buyers will suffer. In any case, even the sharp increase in Trump’s tariffs and even the direct ban on imports of crude oil have failed to improve domestic supply and demand. Currently, the pressure to implement large-scale production cuts is imminent. The latest news indicates that the Russian Ministry of Energy has asked national oil companies to cut production by 20%.

But most important is when the United States will cut production. Although the United States is not dominated by state-owned companies like other oil-producing countries, after Trump took office, he used cheap loans to encourage these oil producers to expand production and take advantage of market share. However, these energy providers are not abandoned now. Although many companies have begun bankruptcy and liquidation, the White House still intends to continue helping rather than negotiate production cuts, which is of great concern to the market.

We will never disappoint the great US oil and gas industry. USA I have instructed the Secretary of Energy and the Secretary of the Treasury to formulate a plan that will make funds available so that these important companies and jobs are secured in the future!

– Donald J. Trump (@realDonaldTrump) April 21, 2020

Trump said on Twitter that he will never disappoint the great American oil and gas industry. He stressed that the Minister of Energy and the Minister of Finance have been instructed to develop a plan that will provide funds to secure these very important companies and jobs. However, this may not solve the real problem at hand: at present, in the world, except for Rotterdam, Fujairah and Singapore, almost all the large oil deposits are already full. In addition to reducing production, the market would prefer to hear news that the United States is committed to building oil storage facilities.

(Source of the first image: shutterstock)

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