Hong Kong: Due to weak demand and excess inventory, the price of crude oil rebounded to a positive area the next day after it fell below $ 0.00 the next day. At the same time, the sharp drop in commodities caused Asian stocks to fall sharply.
West Texas Intermediate Oil (WTI), which was delivered in May, was priced at $ 1.10 per barrel, after New York plunged to an unprecedented low of $ 37.63. The pandemic stalled the global economy, transportation and factory activities.
The May futures were sold because the contract expired late on Tuesday, which means traders need to find buyers to actually own the oil. With the scarcity of storage, this work is almost impossible.
However, the focus now is on the June contract, which has a transaction volume that is more than 30 times higher. It rose from $ 20.43 on Monday to $ 21 per barrel.
The international benchmark price of Brent crude for June delivery was US $ 25.75 per barrel.
JP Morgan Asset Management’s Wai Hui said the WTI’s plunge “is driven by a sharp drop in demand due to market expectations that the US lock-in may continue into May.”
“It’s not surprising because the flights have been grounded and people have spent much less time driving for work and leisure. If the economy reopens longer than expected, we may see further pressure on the futures curve. “
He added that the company is still producing oil because the cessation of production “is not feasible for some producers because it may permanently damage their oil fields. Therefore, in the long run, leaking its oil for one month still Makes sense. “
After the price war between Saudi Arabia and Russia exacerbated the pandemic, the oil market this year was damaged. Although the two countries have drawn clear boundaries between the disputes and reached agreements with other major producers to reduce daily output by nearly 10 million barrels, this is not enough to make up for the lack of demand.
As a result of large-scale stimulus measures, and signs of a decline in the global new infection rate, the stock market has been in a healthy state for two weeks.
Tokyo fell 1.6% in the morning, while Hong Kong, Sydney, Seoul, Taipei and Manila also fell more than 1%.
Both Shanghai and Singapore fell 0.8%, while Jakarta and Wellington also fell.
Although there are signs that the virus has caused damage, as the global blockade has come into effect, the virus has infected nearly 2.5 million people and killed 170,000 people. It is currently mitigating, which has gradually restored some countries to normal .
Analysts warned that the decline in inventories may indicate that the recent rise was too fast, too fast, and there is a possibility of selling again.
The money market reflects the escape from security, the dollar gains against high returns, and high-risk units soar. South Korean won, Australian dollar and New Zealand dollar and Russian ruble all fell more than 1%, while the Indonesian rupiah fell 0.9%.