Global oil prices hit 21-year low but stock markets edge higher

Oil prices went negative. Here's why

The collapse follows a historic rout on Monday when US oil for May delivery traded at negative prices, the combination of demand evaporated due to the pandemic, oversupply and a shortage. Storage criticism for excess barrels has seen traders effectively paying people to get American crude out of their hands.

US oil futures for the month of June also plunged Wednesday and fell 5.7% to $ 10.91 a barrel, reversing an increase at the start of trading hours in Asia. The price of a barrel of West Texas Intermediate crude stood at $ 11.57 on Tuesday after falling to $ 6.50.

Brent crude fell to $ 15.98 a barrel before stabilizing around $ 17.30, down more than 10%.

The market is worried about the lack of oil poles to store barrels that nobody wants, because the coronavirus pandemic is making demand for crude disappear. While Saudi Arabia and Russia recently reached an agreement with other members of the OPEC + alliance to reduce supply from May 1 by a record amount, it did little to allay fears.

“Oil futures prices are expected to recover once demand for the physical product increases, but that will appear in a few months,” wrote Jasper Lawler, research manager at the London Capital Group.

Several members of the OPEC + alliance discussed the price crash during a conference call Tuesday, although key members, including Saudi Arabia and Russia, did not participate, according to Reuters.

“Panic spreads not only among oil traders, but also within OPEC +, prompting him to hold an emergency conference call yesterday, although no new strategic consensus has yet been reached. been achieved, “wrote Eugen Weinberg, Commerzbank commodity research manager, in a note. to customers on Wednesday.

Oil panic hung over the Asian markets. Japan Nikkei ((N225) and South Korea Kospi ((KOSPI) fell 0.7% and 0.9%, respectively, on Wednesday.
Hong Kong’s Hang Seng Index ((HSI) and China Shanghai composite ((SHCOMP) started the day down, but closed up 0.4% and 0.6%.
European markets opened higher, Germany DAX ((DAX) earning 1.6%, just like the FTSE 100 ((UKX) in London. France CAC 40 ((CAC40) increased by 1.1%.
Drawing inspiration from Europe, US equity futures posted gains. Dow ((UNDUE) futures were up 1.3%. S&P 500 ((SPX) futures and Nasdaq ((COMP) both futures were 1.4% higher.
On Wall Street, Chipotle ((CMG) and Netflix ((NFLX) released its first quarter results after the bell on Tuesday. Netflix has seen massive subscriber growth, exceeding its own expectations, with a whopping 16 million subscribers added.

Subscriber earnings were fueled in part by home orders for coronavirus and popular Netflix releases such as the reality series “Love is Blind” and the documentary series “Tiger King”.

– Julia Horowitz, Anneken Tappe and Frank Pallotta contributed to this report.

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