April 21, 2020

Oil contracts turn negative amid collapsing demand and storage shortages

Share on facebook
Share on twitter
Share on linkedin
Share on email

In Short

China’s official NBS PMIs bounced back in March. The manufacturing PMI rose to 52.0, up from 35.7, while the non-manufacturing increased to 52.3 after 29.6 in February.
Oil contracts turn negative amid collapsing demand and storage shortages
Share on facebook
Share on twitter
Share on linkedin
Share on email
  • Yesterday the short-term forward price for WTI oil turned negative for the first time in history. This was mainly due to the way contracts are settled, but highlights the impact of the collapse in demand on inventories.
  • The US-brokered deal to cut global production by 10% is proving inadequate as global demand is dropping by 30%
  • Weak demand following uncertain growth prospects and inventories will keep a big pressure on prices and we do not see any scope for increases before Q3.
  • The outlook of lower for longer prices is starting affecting oil producing countries and step up the stress on the overleveraged US shale sector.
OIL CONTRACTS TURN NEGATIVE AMID COLLAPSING DEMAND AND STORAGE SHORTAGES

Also interesting

Traffic-highway-Business-district-Jakarta-Emerging
00:11:38
April 19, 2021
Fixed Income

The Spotlight ǀ Equity-like returns with bond-like volatility investing in 75+ emerging economies

China-flag-with-indicators-and-chart
April 16, 2021
Market Commentary

China’s Q1 GDP growth: Strong year-on-year growth amid weak momentum

size 3
April 15, 2021
Market Commentary

COVID-19 UPDATE Facts & Figures