New York.- The price of Texas intermediate oil (WTI) it fell 3.4% today and closed at $ 12.34 a barrel, in a day marked by volatility and which accentuates the oil crisis due to storage problems in a market hit hard by the demand crisis generated by the COVID-19 pandemic.
At the end of trading on the New York Mercantile Exchange (Nymex), WTI futures contracts for June delivery subtracted $ 0.44 from yesterday’s prior session, in a day in which the United States crude oil fell 25% and then rose 6% in the middle session and finally closed with a drop of more than 3%.
Oil thus alternated gains and losses in a very volatile session, and investors continued to see declining crude storage capacity worldwide, although some losses were offset by optimism about the reopening of economies.
Bjornar Tonhaugen, head of oil markets at Rystad Energy, said in a note that oil did not drop further due to optimism about the reopening of economies in different countries and also in the United States.
“An increase in commercial activity will give a boost to domestic demand for US oil. This may postpone filling the country’s oil storage a little more in the future,” added Tonhaugen, while rushing to warn that demand will continue depressed.
“The reopening of industrial activity in the United States can give a temporary boost to pricesAs traders need room to breathe, we don’t expect levels to last. Oil prices are likely to average $ 20 a barrel in the second quarter, and the lowest levels will come sometime in May, “he added.
As demand falls, more producers have announced production cuts. But some analysts believe it will not be fast enough to combat the unprecedented drop in demand following the pandemic.
In early April, the Organization of the Petroleum Exporting Countries (OPEC) and its oil-producing allies agreed to a record cut in production that will take 9.7 million barrels a day from the market as of Friday, while Exxon and Chevron are among US-based companies who have reduced their operations.
“Despite the upcoming OPEC + production cuts, more production needs to be cut, particularly in the US and Canada,” to avoid further depressing the value in June, S&P Global Platts chief analyst Chris Midgley told CNBC.
Last week, the International Monetary Fund said the world economy is expected to contract by 3% this year, which Midgley said will lead to a slower recovery in oil demand.
In this context, gasoline futures contracts maturing in June totaled nearly two cents to $ 0.66 a gallon, and natural gas contracts, maturing the same month, subtracted more than two cents to $ 1.79 per thousand feet cubic.