Oil prices have climbed after falling more than a quarter in the past two days, and volatility may continue, as the market is worried that as investors and a major fund withdraw from the June contract, oil prices may fall below zero again. Our company sells API 7-1 drill collar.
New York futures prices rose 14% after falling on April 28. Earlier, the world' s largest oil exchange-traded fund (ETF) withdrew from short-term contracts because the increasing inventory forced investors to face the possibility that they might not have any actual inventory space.
According to people familiar with the matter, the American Petroleum Institute reported that crude oil inventories in Cushing, Oklahoma, where West Texas Intermediate Crude Oil (WTI) was delivered, increased by 2.49 million barrels last week. UBS expects that the reserves of this key storage center may reach its limit next month.
At present, there is a global fuel surplus and oil storage capacity is being tested. Although the world' s largest oil producer has agreed to cut daily production by nearly 10 million barrels from next month in an attempt to balance the market, this may not be enough to deal with the impact of the collapse in consumption.
VI Investment Corp. senior commodity analyst Will Sungchil Yun said in a telephone interview in Seoul: "Although there are some short covering, unless the stocks show signs of shrinking or find an effective treatment for coronavirus, otherwise the price is unlikely to be from the current The level rebounded sharply. "
The GSCI commodity index is a popular investment product sought after by pension funds and other global investors. When S & P change its investment policy, banks that sell the product, in turn, will transfer their shares, triggering turmoil in the energy market. On April 28, West Texas Intermediate crude oil June futures fell more than 21% to nearly $ 10 a barrel and then recovered most of the lost ground.
The cumulative effect of the readjustment of positions by all funds is that about 46% of open positions in June contracts have evaporated in the past 6 trading days. As of Tuesday, a total of 318,000 open positions are due after 15 trading days. About 610,000 barrels of May WTI contracts expired at the same time.
The spread between June WTI and July crude oil futures narrowed to $ 4.35 per barrel, and the spread from December crude oil futures was about $ 14.
API reported on April 28 that US crude oil inventories increased by 9.98 million barrels last week. If the energy information data on April 29 is confirmed, this will be the 14th consecutive week of inventory increases. Analysts surveyed by Bloomberg predict that inventories will increase by nearly 12 million barrels.
The above information is provided by drill pipe manufacturers.
