Today’s session began for “black gold” with a fairly significant decline in quotations. The asset is getting cheaper because the market participants are afraid that the oversupply will maintain. Experts fear a repetition of the story a week ago, when the overcrowded storage together with a lack of demand led to a collapse in prices for WTI futures contracts.
At 7.15 Moscow time, June futures for Brent crude oil were trading at around $ 21.1 per barrel, which is lower than the closing price by $ 0.34.
At the same time, June futures for WTI oil fell far too drastically- by 8% or 1.37 US dollars; the asset stopped at 15.57 US dollars per barrel. Since the start of the trading session, WTI has shown a decline of 10%.
Unfortunately, even the decision of Saudi Arabia to start the early cut in production could not keep oil quotes from falling. By the way, Kuwait, Nigeria and Algeria also expressed their readiness to early implement the OPEC+ agreement.
It is estimated that about 65% of all global oil storage facilities are currently full. Due to the imbalance between supply and demand, stocks are replenished daily by 50 million barrels. A simple calculation shows that while maintaining such a pace, fulfilling of every conceivable storage will come no later than in a month.
The material was prepared with the participation of Katya Wilson,
a leading analyst of the brokerage company UFT Group.